Company abcrsquos free cash flow to equity fcfe was 50, Ask an Expert

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Company ABC’s free cash flow to equity (FCFE) was $50 million at the beginning of the year. The FCFE is expected to grow at a rate of 20% for the next two years when the required return on the stock will be 12%. In year three and thereafter (forever) the FCFE growth rate will be 2% and the required return on the stock will be 10%. The company has 10 million shares outstanding. Find the fair price of ABC’s stock.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92311434

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