What is the intrinsic value

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Reference no: EM13304237

The estimated the company's free cash flows for the following years:

Year Free Cash Flow
1 $3,000
2 4,000
3 5,000

The analyst estimates that after three years, free cash flow will grow at a constant rate of 6% per year. The analyst estimates that the company's WACC is 10%. The company's debt and preferred stock has a total market value of $25,000 and there are 1,000 outstanding shares of common stock. What is the (per-share) intrinsic value of the company's common stock?

a. $ 78.31
b. $ 84.34
c. $ 98.55
d. $109.34
e. $112.50

 

Reference no: EM13304237

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