Determine what should be the companys stock price today

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Assume that today is December 31, 2012, and that the following information applies to Vermeil Airlines:

After-tax operating income [EBIT(1 - T)] for 2013 is expected to be $700 million.
The depreciation expense for 2013 is expected to be $90 million.
The capital expenditures for 2012 are expected to be $450 million.
No change is expected in net operating working capital.
The free cash flow is expected to grow at a constant rate of 7% per year.
The required return on equity is 16%.
The WACC is 10%.
The market value of the company's debt is $4 billion.
180 million shares of stock are outstanding.

Using the corporate valuation model approach, what should be the company's stock price today?

Reference no: EM13334487

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