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Estimate of the current intrinsic stock price

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Reference no: EM13971204

This year, Huxley Building Supplies' free cash flow is $1.75 million. Its free cash flow growth rate is expected to be constant at 25% for 2 years, after which free cash flows are expected to grow at a rate of 6% forever. Its weighted average cost of capital WACC is 12%. Huxley has $5 million in short-term investments and $7 million in debt and has 1 million shares outstanding. What is the best estimate of the current intrinsic stock price?

a. $39.58

b. $40.64

c. $42.64

d. $41.71

e. $44.92

Reference no: EM13971204

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