What is a fair value for the firm shares

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Question - Jasper Energy is a growing company with $2 million of debt at a before-tax cost of 8%, and it pays 40% corporate taxes. The firm's debt-equity ratio is 1.5 and there are 1 million shares outstanding with a cost of capital of 14%. If the firm expects to have $1 million of free cash flow, and a growth rate of 5%, what is a fair value for the firm's shares?

Reference no: EM132911629

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