A Corp has never paid a dividend. Free cash flow is projected to follow the timeline below.
After the third year, FCF is expected to grow at 8% annually. The WACC is 14%.
$M Year
1 2 3
-20 60 80
-What is A's Terminal Value?
- What is the current value of operations?
- Suppose A has $5M in marketable securities, $200M in liabilities, and 20M shares of stock. What is A's share price?