What would be the two values for the share price

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Reference no: EM131049212

You have been asked to value a company using the FCF method. The free cash flow last year for the company was $20 million. Free cash flow for next year expected to be -$20 million. The following year you expect is to be $15 million. Then you project the cash flows will grow at 15.00% for the following three years and slow to a sustainable growth rate of 5.00% thereafter.

The firm has 5 million shares outstanding and cash of $50 million. In addition the firm has a par value of bonds outstanding of $25 million that have a coupon rate of 4.00%, a maturity of 5 years, a yield to maturity of 4.25%. What would be the two values for the share price? Note the firm WACC is 10%.

Reference no: EM131049212

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