Problemsmith technologies is expected to generate 125, Ask an Expert

Accounting

Problem:

Smith Technologies is expected to generate $125 million in free cash flow next year, and FCF is expected to grow at a constant rate of 8% per year indefinitely. Smith has no debt or preferred stock, and its WACC is 11%.

Requirement:

Question: If Smith has 35 million shares of stock outstanding, what is the stock's value per share?

Note: Show supporting computations in good form.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91173015

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