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Problem:

Conundrum Mining is expected to generate $12 million, $18 million, $22 million and $26 million in free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 12% and Conundrum has cash of $80 million, debt of $60 million, and 30 million shares outstanding,

Required:

Question 1: What is Conundrum's expected current share price?

A) $10.84

B) $13.72

C) $16.16

D) $16.25

Note: Explain all steps comprehensively.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91148458

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