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What would calculate the expected share price to be

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Reference no: EM132873528

Assume a company expects to generate the following free cash flows over the next five years:

Year 1: $10 million

Year 2: $15 million

Year 3: $22 million

Year 4: $30 million

Year 5: $37 million

Question 1: The company expects these cash flows to grow at a perpetual growth rate of 7% each year afterward. The company also has cash of $100 million, debt of $25 million, and 15 million shares outstanding on their balance sheet. If their cost of capital is 9%, what would you calculate their expected share price to be?

Reference no: EM132873528

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