Answer6+Revised[1]

Answer6 Revised[1] - So Total market value of Common stock = $583.33 $125 = $458.33 million As the no of common shares are 15 million the intrinsic

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Answer: As we know for a constant growth rate, Here, FCF(1)= expected end of the year cash flow for year 1. WACC= Weighted average cost of capital g= growth rate in free cash flow So, Given that, Amount of long term debt and preferred stock=$125.00 million As we know that,
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Unformatted text preview: So, Total market value of Common stock = $583.33 - $125 = $458.33 million As the no of common shares are 15 million, the intrinsic value of per share of common stock is Value per share = $458.33 million/15 million = $30.56...
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This note was uploaded on 12/30/2010 for the course FIN 5405 taught by Professor Tapley during the Spring '08 term at University of Florida.

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