Assume that today is december 31 2012 and that the, Ask an Expert

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Assume that today is December 31, 2012, and that the following information applies to Vermeil Airlines:

a. After-tax operating income [EBIT(1-T)] for 2013 is expected to be $500 million.

b. The depreciation expense for 2013 is expected to be $100 million.
c. The capital expenditures for 2013 are expected to be $200 million.
d. No change is expected in net operating working capital.
e. The free cash flow is expected to grow at a constant rate of 6% per year.
f. The required return on equity is 14%.
g. The WACC is 10%.
h. The market value of the company's debt is $2 billion.
i. 200 million share of stock are outstanding.

Using the corporate valuation model approach, what should be the company's stock price today?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9874388

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