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Author Question: You have been assigned the task of using the free cash flow model to estimate Petry Corporations ... (Read 44 times)

Gabby

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on: Aug 7, 2023

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

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by Gabby on Aug 7, 2023

miro2222

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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Gabby

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

Viet Thy

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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