Question

Question 9 out of 2 pots You expect Canyon Buff Corp to penerate the following free cash flows over the next five years Year FCF (5 millions) 75 84 96 111 Beginning in year sex, you estimate that Chryon Buff free cash flows will grow at 5% per year and that Canyon Buff's weighted average cost of capital is 154 (Hint use Excel to do the calculation) The enterprise value for Canyon Buff Corporation is $_ million Instruction: Note the unit is million Type ONLY your numerical wwer, NO Sign, and found to ONE decimal place. Again, the unit is million Selected Answer: None Given Question 10 Dout of 2 points tra Credit bonus points) (Cost from 9) I Canyon Buff has $20 million of cash, 5400 million of debt and 12 million shares of stock out Instruction Type ONLY your numerical wwer, NO S andro ONE decimal place there the price pershare for Canyon Buff is $_ Selected Answer phone Given

please answer question #10

Answer 1

rate positively ..

we cant solve 10 with out solving 9 .. therefore find below answer of both ....

	Ans 9
	Year	FCF	Terminval value	Total cash flow	PVIF @ 15%	present value
	1	75		75	0.869565217	65.2
	2	84		84	0.756143667	63.5
	3	96		96	0.657516232	63.1
	4	111		111	0.571753246	63.5
	5	120	1260	1380	0.497176735	686.1
						941.4
	terminal value = Expected FCF in year 6/(required rate - growth rate)
			=120*105%/(15%-5%)
			1260
	therefore Enterprise value =			941.4	million
	Ans 10
		computation of price per share
		Enterprise value =			941.42
	Less:	Debt			-400
	Add:	Cash			20
	i	Equity value =			561.42
	ii	Number of share =			12
	iii=i/ii	Price per share =			46.8
		Therefore answer =			46.8