ABS Limited is a fast-growing supplier ofoffice equipment. Analysts project the following free cash flows...
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ABS Limited is a fast-growing supplier ofoffice equipment. Analysts project the following free cash flows ( FCF ) during the next 3 years, after which FCF is expected to grow at a constant 7%. The weighted average cost ofcapital is 13% Year 2 3 Free cash flow ($ million) ($20) $30 $40 (b) What is ABS Limited terminal value? (c) What is the value ofthe company? (d) Suppose ABS Limited has $100 million in debt and 10 million shares of stock. What is the price per share?
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