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A company is expected to generate free cashflows of $60 million next year, projected to...

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Finance

A company is expected to generate free cashflows of $60 million next year, projected to grow at a 5% annual rate until the end of year 3, and then at a stable 3% rate in perpetuity thereafter. You estimate that the company's cost of capital is 13%. It has $250 million debt and $15 million cash. Number of shares outstanding is 10 million. How much would you be willing to pay for each share? Round to the nearest cent.

a. $29.9

b. $33.8

c. $38.5

d. $46.7

e. $54.1

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