Finding galaxy corp estimated intrinsic value per share

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Galaxy Corp. is expected to generate a free cash flow (FCF) of $9,730.00 million this year (FCF1 = $9,730.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF2 and FCF3). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF4). Assume the firm has no nonoperating assets. If Galaxy Corp.'s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Galaxy Corp.? (Note: Round all intermediate calculations to two decimal places.)

A. $231,881.02 million

B. $209,612.62 million

C. $29,367.56 million

D. $174,677.18 million

Galaxy Corp.'s debt has a market value of $131,008 million, and Galaxy Corp. has no preferred stock. If Galaxy Corp. has 675 million shares of common stock outstanding, what is Galaxy Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)

A. $194.09

B. $71.16

C. $63.70

D. $64.70

Reference no: EM132853799

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