What is doziers terminal or horizon value hint find the

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Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dozier"s weighted average cost of capital is WACC = 13%.



Year



1

2

3

Free cash flow ($ millions)

-$20

$30

$40

a. What is Dozier"s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.)

b. What is the current value of operations for Dozier?

c. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share?

Reference no: EM13483492

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