Calculate the price of the company stock

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Reference no: EM133068501

Lockean Co. has the following projected sales, costs, net investment, and free cash flow in millions. The anticipated growth rate in free cash flows after year 6 is 3% per year forever. There are 10 million shares outstanding and investors require a return of 7% on the company's stock. Suppose instead that you estimate the terminal value using a PE multiple of 18, calculate the price of the company's stock. (Round to 2 decimals)

 ($ in millions)

1

2

3

4

5

6

Sales

220

242

266

292

321

353

Costs

143

157

172

190

209

229

Taxes

28

31

34

38

41

45

OCF (net income)

49

54

60

64

71

79

Net Investment

20

22

24

26

29

29

FCF

29

32

36

38

42

50

Reference no: EM133068501

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