You expect CCM Corporation to generate the following free cash flows over the next five years: Year 1 2 3 4 5 FCF ($ millions) 25 28 32 37 40 Following year five, you estimate that CCMʹs free cash flows will grow at 5% per year and that CCMʹs weighted average cost of capital is 13%. 1. The enterprise value of CCM corporation is closest to: A) $396 million B) $290 million C) $382 million D) $350 million “2. If CCM has $150 million of debt and 12 million shares of stock outstanding, then the share price for CCM is closest to: ” A) $49.50 B) $11.25 C) $20.50 D) $22.75
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