Dividend discount model

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LaForge will use its risk-adjusted rate of return to assist it in arriving at its current stock price, which is 12%. In addition, its long-run constant growth rate for Free Cash Flow (FCF) is 6%.  It is anticipated that the projected FCF per share for next year is $7.25. What is the calculated price? Hint: Substitute FCF/Share in lieu of Dividends/Share in the “Dividend Discount Model.” 

Reference no: EM131497470

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