Estimate fair market value per share of torino marine equity

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Problem

The following is a four-year forecast for Torino Marine. Year 2022 2023 2024 2025 Free cash flow ($ millions) -55 76 93 115 Estimate the fair market value of Torino Marine at the end of 2021. Assume that after 2025, earnings before interest and tax will remain constant at $200 million, depreciation will equal capital expenditures in each year, and working capital will not change. Torino Marine's weighted-average cost of capital is 15 percent and its tax rate is 30 percent. Note: Do not round intermediate calculations. Get the instant assignment help. Estimate the fair market value per share of Torino Marine's equity at the end of 2021 if the company has 40 million shares outstanding and the market value of its interest-bearing liabilities on the valuation date equals $300 million.

Reference no: EM134025700

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