Firm estimated intrinsic value per share of common stock

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1. Peppers Bakery, LLC is undergoing a restructuring, and its free cash flows are expected to vary considerably during the next few years. However, the FCF is expected to be $72 million in Year 6, and the FCF growth rate is expected to be a constant 5.2% beyond that point. The weighted average cost of capital is 13.5%. What is the horizon (or continuing) value (in millions) at t=6?

2. You have been asked to estimate the intrinsic value of CSU Technologies’ stock. The end-of-year free cash flow (FCF1) is expected to be $21.45 million,, and it is expected to grow at a constant rate of 8.00% a year thereafter. The company’s WACC is 11%, it has $142.0 million of long-term debt plus preferred stock outstanding and there are 13.0 million shares of common stock outstanding. What is the firm’s estimated intrinsic value per share of common stock?

Reference no: EM131989675

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