What is the best estimate of the stock price per share

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1. Kilt Corp. forecasts a negative free cash flow for the coming year, FCF1 = -$20 million, but it expects positive numbers thereafter, with FCF2 = $45 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 12.5%, what is the firm’s total corporate value, in millions?

2. Based on the corporate valuation model, Millers Inc.’s total corporate value is $350 million. The balance sheet shows $120 million of notes payable, $25 million of long-term debt, $50 million of preferred stock, and $150 million of common equity. The company has 25 million share of stock outstanding. What is the best estimate of the stock’s price per share?

Reference no: EM131989668

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