Majong Inc. forecasts that it will have the free cash flows to equity shown below....
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Finance
Majong Inc. forecasts that it will have the free cash flows to equity shown below. The free cash flows are expected to grow by 5% per year after year 3.
| Year | 1 | 2 | 3 |
| FCFE ($ million) | -20 | 48 | 54 |
The cost of equity is 13%. The firm has 10 million shares outstanding.
*formulas in excel
What is Majong's horizon value (terminal value) (in $ million)?
What is the firm's market value of equity today (in $ million)?
What is a good estimate of Majong's price per share?
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