What firm equity value per shares is

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Assume you have a company that has following financials for fiscal year 2020.

$300 million in cash

$600 million in book value of debt

$500 million in market value of debt

$1,000 million in book value of equity

Firm will pay dividends as follows: year 2021=$5, year 2020=$4.5, and year 2023=$4.

(all numbers are per share amounts paid at the corresponding fiscal year end). Dividends are expected to decline at 3% per year thereafter.

Problem 1: If cost of equity is 12%, WACC of capital is 8%, and firm has 100 million shares outstanding in 2020, then firm's equity value per shares as of 2020 is?

Reference no: EM132869316

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