Share based on the value-based management model

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MNB Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 and t=3 will be $20 million and $30 million respectively. After Year 3, FCF is expected to grow at a constant rate of 4% per year forever. The firm's weighted average cost of capital is 10%. The firm has no non-operating assets. The firm has a total amount of debt equal to $100 million and has 5 million common shares outstanding. what is the price per share based on the value-based management model?

a. $66.28

b. $70.6

c. $68.9

d. $64.13

e. $62.09

Reference no: EM131616169

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