Calculate the value of its common stock

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Watkins, Inc. has never paid a dividend, and when it might begin paying dividends is unkown. Its current current free cash flow is $100,000 and this FCF is expected to grow at a constant 7% rate. The weighted average cost of capital is WACC = 11%. Watkins currently holds $325,000 of non-operating marketable securities. Its long-term debt is $1,000,000, but it has never issued preferred stock. Watkins has 50,000 shares of common stock outstanding.

Calculate the value of its common stock

Calculate the per share stock price.

Reference no: EM131020396

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