You must estimate the intrinsic value of Gallovits Technologies' stock. Gallovits's end of-year free cash flow (FF) is e
Posted: Thu Apr 28, 2022 1:37 pm
You must estimate the intrinsic value of Gallovits
Technologies' stock. Gallovits's end of-year free cash flow (FF) is
expected to
be $25 million, and it is expected to grow at a constant
rate of 8.5% a year thereafter. The company's WACC is 11%.
Gallovits
has $200 million of long-term debt plus preferred stock,
and there are 30 million shares of common stock outstanding. What
is
Gallovits' estimated intrinsic value per share of common
stock?
Ans:
Technologies' stock. Gallovits's end of-year free cash flow (FF) is
expected to
be $25 million, and it is expected to grow at a constant
rate of 8.5% a year thereafter. The company's WACC is 11%.
Gallovits
has $200 million of long-term debt plus preferred stock,
and there are 30 million shares of common stock outstanding. What
is
Gallovits' estimated intrinsic value per share of common
stock?
Ans: