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What is the market value of the firm

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Question - Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be $7 million, at t = 2 will be $8.5 million, and at t = 3 will be $9.9 million. After Year 3, FCF is expected to grow at a constant rate of 5% forever. The firm also has $5 million in ST Investments, $90 million in debt, and 5 million shares outstanding. If the weighted average cost of capital is 12%, what is (a) the market value of the firm, and (b) the intrinsic (fair market) value per share of the common stock?

Reference no: EM132963503

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