Youve been hired by the firm of JB and Makya, Inc. as an analyst. They...
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Accounting
Youve been hired by the firm of JB and Makya, Inc. as an analyst. They would like you to utilize the corporate valuation model in determining the stock price of Purina. You estimate the following cash flows for Purina. After the third year, you expect the growth rate to be 5%. Purina has $200 million currently in debt and 5 million shares of stock outstanding. Assuming an 8% required return, what is the intrinsic value of Purinas stock?
CF1= %15 million
CF2= $25 million
CF3= $32 million
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