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Please Provide step by step explanation on how the answer was found. Question: If you have been assigned the task of using the corporate valuation...

  • Please Provide step by step explanation on how the answer was found.


Question::::::


If you have been assigned the task of using the corporate valuation model to estimate Keen Co.'s intrinsic value. Keen's WACC is 8%, its expected end-of-year free cash flow (FCF1) is $50 million, the FCFs are expected to grow at a constant rate of 3% a year in the future, the company has $250 million of long-term debt plus preferred stock, and it has 25 million shares of common stock outstanding. What is the company's estimated intrinsic value per share of common stock?


a. $20.95


b. $24.50


c. $30.00


d. $36.25


e. $40.00


  • Please show formula.

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