What is the intrinsic price per share

Reference no: EM131794498

Problem: Free Cash Flow Valuation

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 9% rate. Dozier's weighted average cost of capital is WACC = 18%.

	Year
	1	2	3
Free cash flow ($ millions)	-$20	$30	$40

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.) Round your answer to two decimal places.

What is the current value of operations for Dozier? Round your answer to two decimal places. Round intermediate calculations to two decimal places.

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? Round your answer to the nearest cent. Round intermediate calculations to two decimal places.

Reference no: EM131794498

Questions Cloud

What is the best measure of risk for an asset : What is the best measure of risk for an asset held in isolation (i.e., comparing risk of one asset to one other asset)?

Find the preorder traversal of the binary tree : Perform a preorder traversal of this binary tree.Refer to the following binary tree.

Explain when to call the bond and your rationale : Include a detailed explanation of the conclusion you reached concerning whether or not to call the bond before maturity and Discuss the advantages

Perform an in order traversal of this binary tree : Perform an in order traversal of this binary tree.Refer to the following binary tree.

What is the intrinsic price per share : 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?

Discuss the arguments for and against segment reporting : ACCT603 - 5C ACCOUNTING FOR CORPORATE STRUCTURES. Discuss the arguments for and against segment reporting as required by AASB 8

What is the modified irr at a given discount rate : A project costs $22,900 to initiate. It is expected to provide cash flows of $15,900 in Year 1 and $9,900 in Year 2.

Find the height of its left sub tree and the height : For each of the nodes, find the height of its left sub tree and the height of its right sub tree.

Provide the formula for the debt ratio : Provide the formula for the Debt Ratio and explain how it is computed. and Provide an example of how this ratio can be used indecision making in business.

User Account

All Pages