What is an estimate of barrett price per share

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Barrett industries invest a large sum of money in R&D, as a result it retains and reinvests all of its earnings. A major pension fund is interested in purchasing Barretts stock. The pension fund manager has estimated barretts free cash flows for the next 4 yrears as follows: $3 million, 6 million, 10 million and 15 million. After the fourth year, free cash flow is projected to grow at a constant 7%. Barretts WACC is 12%, its debt to preffered stock total $60 million, and it has 10 million shares of common stock outstanding.

A. What is the present value of the free chas flows projected during the next 4 years?
B. What is the firm's terminal value?
C. What is the firm's total value today?
D. What is an estimate of Barrett's price per share?

 

Reference no: EM13290494

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