Boston beer company sam had free cash flow to the firm last, Ask an Expert

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Boston Beer Company [SAM] had Free Cash Flow to the Firm last year (year 0) of $17,573,700. They have $583,000 in debt, $57,180,000 in cash on hand, and 12,980,000 shares outstanding. Use a simple DCF model to value SAM on a per share basis (project 5 years of FCFF, find a terminal value using the growing perpetuity shortcut, and take the present value). Assume FCFF will grow at 30% for 5 years, after which it will grow at 3% for eternity. Assume WACC is 8%.

What is the share price estimate of the intrinsic value of SAM?

A. 87.05

B. 22.05

C. 242.65

D. 198.65

2. Under Amour [UA] has a P/E ratio of 94.44 and a PEG ratio of 3.88 (according to Yahoo! Finance). How much are analysts expecting UA’s EPS to grow per year over the next five years?

A. 34.34%

B. 54.34%

C. 44.34%

D. 24.34%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92867663

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