Question: Corporate Valuation
Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 5% rate. Dozier's weighted average cost of capital is WACC 10%.
|
Year |
|
1 |
2 |
3 |
| Free cash flow ($ millions) |
- $20 |
$30 |
$40 |
What is Dozier's terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.). Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million
What is the current value of operations for Dozier? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places. $ million
Suppose Dozier has $11 million in marketable securities, $80 million in debt, and 8 million shares of stock. What is the price per share? Round your answer to the nearest cent. $