What is the most you should pay per share

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You are considering buying common stock in Grow On, Inc. You have calculated that the firm's free cash flow was $8.00 million last year. You project that free cash flow will grow at a rate of 7.0% per year indefinitely. The firm currently has outstanding debt and preferred stock with a total market value of $13.88 million. The firm has 1.36 million shares of common stock outstanding. If the firm's cost of capital is 21.0%, what is the most you should pay per share for the stock now?

Reference no: EM132347984

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