Answers
rate positively ..
Firstly we have to compute the value of firm | ||||||||
Value of firm = | Free cash flow next year /(required rate - growth rate) | |||||||
39/(12.9%-1.9%) | ||||||||
354.55 | million | |||||||
Secondly, we have compute the equity value | ||||||||
Value of firm = | 354.55 | million | ||||||
Less: Debt = | -34 | million | ||||||
Add: Cash = | 6 | million | ||||||
A | Value of equity | 326.55 | million | |||||
B | Number of share = | 21 | million | |||||
C=A/B | Price per share = | 15.55 | ||||||
Ans = | $ 15.55 | |||||||
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