What is each share of common worth today

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Problem 1: MMP Incorporated generated FCF in the most recently completed year of $780,000. We expect FCF to grow by 10% in year 1, 8% in year 2 and 7% in year three. Beginning in year four, FCF will begin to grow at a constant rate of 6%. The required rate of return on this investment is 13%. MMP has debt of $2,000,000, preferred stock of $1,000,000 and 400,000 shares of common stock outstanding. What is each share of common worth today?

Group of answer choices

Option 1: $26.59

Option 2: $24.34

Option 3: $23.94

Option 4: $20.72

Reference no: EM132920764

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