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As chairman of Alpha Inc you are evaluating a potential move to acquire Beta Corp. You both have similar risk. "Alpha Inc" has a WACC of 9%. Beta Corp finished the past fiscal year with $3,250,000 in FCF (free cash flow). Beta Corp also has $12,000,000 in debt, $2,500,000 in marketable securities, 4 million shares in common stock and 1 million shares in preferred stock. Preferred stock is trading at $22. If free cash flow for beta corp will grow at 4% annually, what is the most you are willing to pay per share of Beta Corps common stock?

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Financial Management, Finance

Category:- Financial Management
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