Assumptions and assuming a discount rate

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Assume the forecasted free cash flows over the next ten years from year 1 to year 10 for the firm Interco are (cash flows are in millions of $): year 1 = 186, year 2 = 202, year 3 = 220, year 4 = 239, year 5 = 260, year 6 = 242, year 7 = 270, year 8 = 287, year 9 = 311, year 10 = 339. Assume that these cash flows all occur at the end of the year. Also assume that the terminal firm value of Interco at the end of year ten is estimated to be 10 times its year ten free cash flow of $339 million. Also assume that Interco has net debt obligations of $318.5 million and that there are 37.5 million shares of stock.

Based on the above assumptions and assuming a discount rate for the total firm operations (WACC) of 16%, estimate the price per share for Interco's stock. I need help reporting the answer to the nearest dollar (e.g. $91).

Reference no: EM131767520

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