What is the current total firm value

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Acme Corp is expected to generate a free cash flow (FCF) of $3,550 million this year (FCF1=$3,550 million) and the FCF is expected to frow at a rate of 25% over the following two years. (FCF2 and FCF3) after the third year, however, the FCF is expected to grow at a constant rate of 3.9% per year, which will last forever (FCF4). If Acme Corp's weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Acme Corp?

a) 84,602.11 million b) 76,477.45 million c) 63,731.21 million d) 10,714.80 million

Acme corp's debt has a market value of $47,798 million and Acme Corp. has no preferred stck. If Acme Corp has 300 million shares of common stock outstanding, what is Acme Corp's estimate intrinsic value per share of common stock?

a) 58.42 b) 159.33 c) 52.11 d) 53.11

Reference no: EM132014553

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