Reference no: EM133070119

QUESTION - You have estimated that the present value of all future free cash flows of Venice Surf Co. is $295 million. The company has non-operating assets of $32 million and non-operating liabilities of $93 million, and there are 5 million shares of common stock outstanding. You have just completed a valuation seminar and learned that your valuation of free cash flows using only expected year-end cash flows may be flawed. Thus, your estimate of the present value of the future free cash flows must be adjusted to account for cash flows occurring evenly throughout each year rather than only at year-end. Estimate the value of each share of common stock using the free cash flow information above, adjusted to account for cash flows occurring evenly throughout each year, and using a discount rate of 13%.