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11. More on the corporate valuation model Globo-Chem Co. is expected to generate a free cash...

11. More on the corporate valuation model
Globo-Chem Co. is expected to generate a free cash flow (FCF) of $4,735.00 million this year (FCF₁ = $4,735.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Globo-Chem Co.’s weighted average cost of capital (WACC) is 6.30%, what is the current total firm value of Globo-Chem Co.? (Note: Round all intermediate calculations to two decimal places.)

   $15,023.23 million
   $178,024.18 million
   $180,871.81 million
   $150,726.51 million
Globo-Chem Co.’s debt has a market value of $113,045 million, and Globo-Chem Co. has no preferred stock. If Globo-Chem Co. has 375 million shares of common stock outstanding, what is Globo-Chem Co.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)

   $100.48
   $301.45
   $99.48
   $110.53

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Answer #1

4735 Topl. Dator. m Pago Mom u) Question on the corporate Valuation Model ( Calculation of current total value of firm using1=4735*0.94 + [5635*.0.88] + [6706x0.83] 1163023.84 x 0.837 54450.9 +495880 75565,98 135309.76) = $ 150,285,44 millions - Hen

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