Assume Company XYZs currently has capital Structure C under Method 1 where the WACC is...
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Assume Company XYZs currently has capital Structure C under Method 1 where the WACC is 13.20% based on an effective tax rate of 30% and a cost of debt of 10.43%. There are 200 shares currently outstanding. The company just reported (T=0) FCFF of 300 and FCFE of 250. All cash flows are expected to grow at 20% for each of the next three years, then at 6% beginning in year four (T=4) in perpetuity (or indefinitely). If you were an activist investor trying to gain control of Company XYZ, what is the most you would pay per share for the hostile takeover?
A. $6.97
B. $9.62
C. $11.55
D. $15.49
E. $31.36
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