The company has 100 million of long-term debt plus

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Home Mortgage Corp. forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after year 3. The company has $100 million of long-term debt plus preferred stock outstanding, and there are 20 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?

FCFsYear 1 = -$15Year 2 = $10Year 3 = $ 40

Reference no: EM13478340

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