Question: Dozier Corporation is a fast growing supplier of office products. Analysts project the following free cash flows during the next 3 years, after which FCF is expeted to grow at a constant 7% rate. Doziers cost of capital is WACC=13%
Time 1 2 3
FCF -$20 $30 $40
a) What is Dozier's terminal, or horizon value?
b) What is the current value of operations for Dozier?
c) Suppose Dozier has $10 million in marketable securities, $100 million in debt and 10 million shares of stock. What is the price per share?