Corporate valuation Smith Technologies is expected to generate $200 million in f
ID: 2636383 • Letter: C
Question
Corporate valuation
Smith Technologies is expected to generate $200 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Smith has no debt or preferred stock, and its WACC is 13%. If Smith has 65 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.
Each share of common stock is worth $ , according to the corporate valuation model.
Corporate valuation
Smith Technologies is expected to generate $200 million in free cash flow next year, and FCF is expected to grow at a constant rate of 3% per year indefinitely. Smith has no debt or preferred stock, and its WACC is 13%. If Smith has 65 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.
Each share of common stock is worth $ , according to the corporate valuation model.
Explanation / Answer
Total Value of Stock=200000000/(0.13-0.03) 2000000000 Value of each Stock=2000000000/65000000 30.77