Dantzler Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows...

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Dantzler Corporation is a fast-growing supplier of officeproducts. Analysts project the following free cash flows (FCFs)during the next 3 years, after which FCF is expected to grow at aconstant 8% rate. Dantzler's WACC is 13%. Year 0 1 2 3 .............. ....... ....... ....... ....... ....... ....... .............. ....... ....... ....... ....... ....... ...... FCF ($millions) - $24 $35 $57 What is Dantzler's horizon, or continuing,value? (Hint: Find the value of all free cash flows beyond Year 3discounted back to Year 3.) Enter your answer in millions. Forexample, an answer of $13,550,000 should be entered as 13.55. Donot round intermediate calculations. Round your answer to twodecimal places. $ million What is the firm's market value today?Assume that Dantzler has zero non-operating assets. Enter youranswer in millions. For example, an answer of $13,550,000 should beentered as 13.55. Do not round intermediate calculations. Roundyour answer to two decimal places. $ million Suppose Dantzler has$145.80 million of debt and 12 million shares of stock outstanding.What is your estimate of the current price per share? Write outyour answer completely. For example, 0.00025 million should beentered as 250. Do not round intermediate calculations. Round youranswer to the nearest cent. $

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3.6 Ratings (535 Votes)
1 Horizon value FCF4WACC g where FCF4 FCF31g g growth rate in perpetuity 8 FCF4 5718 6156 Horizon value 615613 8 123120    See Answer
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Dantzler Corporation is a fast-growing supplier of officeproducts. Analysts project the following free cash flows (FCFs)during the next 3 years, after which FCF is expected to grow at aconstant 8% rate. Dantzler's WACC is 13%. Year 0 1 2 3 .............. ....... ....... ....... ....... ....... ....... .............. ....... ....... ....... ....... ....... ...... FCF ($millions) - $24 $35 $57 What is Dantzler's horizon, or continuing,value? (Hint: Find the value of all free cash flows beyond Year 3discounted back to Year 3.) Enter your answer in millions. Forexample, an answer of $13,550,000 should be entered as 13.55. Donot round intermediate calculations. Round your answer to twodecimal places. $ million What is the firm's market value today?Assume that Dantzler has zero non-operating assets. Enter youranswer in millions. For example, an answer of $13,550,000 should beentered as 13.55. Do not round intermediate calculations. Roundyour answer to two decimal places. $ million Suppose Dantzler has$145.80 million of debt and 12 million shares of stock outstanding.What is your estimate of the current price per share? Write outyour answer completely. For example, 0.00025 million should beentered as 250. Do not round intermediate calculations. Round youranswer to the nearest cent. $

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