Problem:
General Industries is expected to generate $22 million, $26 million, $29 million, $30 million and $32 million in free cash flows over the next five years, after which FCF are expected to grow at a rate of 3% per year.
Required:
Question: If the weighted average cost of capital is 8% and General Industries has cash of $10 million, debt of $40 million, and $80 million shares outstanding, what is the General Industries' expected current share price?
a. $6.60
b. $6.72
c. $7.67
d. $9.48
Note: Please answer in proper manner and show all computations