FCFE1 18B. FCFF Suppose FCFE = $1.0 million in year 1. The growth rate for Years 2 and 3 is 25%. Year 4 is 10%. The growth rate is expected to normalize to 3% afterwards. If the required rate of return is 12.5%. What is the value of this stock if there are 500,000 outstanding shares? 3 4 5 $1.0000 g Yr 2-3 years 25.00% g Yr 4 year 10.00% g Year 5+ 3.00% k 12.50% PVFCFE # of shares 500,000 Stock Price Kohelin - 1.0
FCFE1 18B. FCFF Suppose FCFE = $1.0 million in year 1. The growth rate for Years 2 and 3 is 25%. Year 4 is 10%. The growth rate is expected to normalize to 3% afterwards. If the required rate of return is 12.5%. What is the value of this stock if there are 500,000 outstanding shares? 3 4 5 $1.0000 g Yr 2-3 years 25.00% g Yr 4 year 10.00% g Year 5+ 3.00% k 12.50% PVFCFE # of shares 500,000 Stock Price Kohelin - 1.0
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 2P
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