Year 1 2 3 4 5 Free Cash Flow ​$22 million ​$26 million ​$29 million ​$30 million ​$32 million General Industries is expected to generate the above free cash flows over the next five​ years, after which free cash flows are expected to grow at a rate of ​% per year. If the weighted average cost of capital is ​% and General Industries has cash of ​million, debt of ​million, and 80 million shares​ outstanding, what is General​ Industries' expected current share​ price?

Answer:

$7.78

Explanation:

Calculation to determine what is General Industriesʹ expected current share price

First step is to calculate the FCF6

FCF6 = $32 million × (1 + 0.05)

FCF6= $33.6 million

Second step is to calculate the V5

V5 = $33.6 million / (0.09 - 0.05)

V5= $840 million

Third step is to calculate V0 using financial calculator

V0 = 652.45 million

Now let calculate expected current share price

P0 = $(652.45 + 15 - 45) million / 80 million

P0 = $7.78

Therefore General Industriesʹ expected current share price is $7.78

What function do regulations like the General Data Protection Regulation (GDPR)
serve?

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If the demand for meals at the Campus Café declines. This will result in...
What will happen to the equilibrium price,supply and quantity

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2. Post journal entries to general ledger accounts.
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4. Journalize and post adjusting entries.
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Demand
  
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Outside vendor 900 600 300
Combination 800 650 500
        
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b. Construct a risk profile for the optimal decision in part (a).

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