Weighted average cost of capital basics

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The financial statements of Lioi Steel Fabricators are shown below the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%.

a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011?

b. What is the horizon value as of 12/31/2010?

c. What is the value of operations as of 12/31/2010?

d. What is the intrinsic price per share for 12/31/2010?

Reference no: EM13154658

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