What is the estimated price per share

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Reference no: EM132014342

Moser Manufacturing just posted a free cash flow of $100 million. The company would like to estimate its stock price using the enterprise valuation model. The company expects free cash flow to grow at 7% and has estimated its WACC (cost of capital) to be 12%. The company has $800 million in debt, $200 million in preferred stock, $250 million in cash, and 200 million shares outstanding.

1. What is the estimated price per share?

2. To what price would this change if the growth was expected to be 20% in year 1, 10% in year 2, and 7% thereafter?

Reference no: EM132014342

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