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Author Question: You have been assigned the task of using the free cash flow model to estimate Petry Corporations ... (Read 85 times)

Gabby

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Question 1

You are considering buying a zero growth stock. If the firm pays a $6 annual dividend, and your required rate of return is 6%, what is the maximum price you would pay for this stock?

$100


$105


$110


$115



Question 2

You have been assigned the task of using the free cash flow model to estimate Petry Corporation’s intrinsic value. Petry’s WACC is 11.5%, its end-of-year free cash flow (FCF) is expected to be $176 million, the FCFs are expected to grow at a constant rate of 7% a year in the future, the company has $240 million of long-term debt plus preferred stock, and it has 61 million common shares outstanding. What is Petry’s estimated intrinsic value per common share?

$59.20


$60.18


$60.95


$71.32



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Marked as best answer by Gabby on Aug 7, 2023

miro2222

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Gabby

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it


Jossy

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Reply 3 on: Yesterday
Excellent

 

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