Find the value of tlv corps share price

Reference no: EM132984250

Question: Your company has been hired to provide investment advice on TLV Corporation.

In the year just ended, TLV Corporation's revenue was $6 million, while the costs of goods sold, overhead, and admin were $2 million. Depreciation was $200,000.00 and the average tax rate 35%. In addition, TLV Corp invests 20% of its EBIT in property, plants, and equipment, and working capital each year. Revenues, costs, depreciation, and investments grow at a rate of 3% until the end of year 5 after which the growth slows down to 2.5%. The cost of unleveraged cash flows is 10%, and the return required by equity holders is 14%. A debt of TLV is $9 million, and there are 3 million shares outstanding.

Using the free cash flow approach, find the value of TLV Corp's share price.

Reference no: EM132984250

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