Homework Answers
b. $36.86 is correct
| Year | Particulars | Amount | Discount factor | Present value |
| 1 | Free cash flow | 17,000,000.00 | 0.8695652 | 14,782,608.70 |
| 2 | Free cash flow | 19,380,000.00 | 0.7561437 | 14,654,064.27 |
| 3 | Free cash flow | 21,705,600.00 | 0.6575162 | 14,271,784.33 |
| 4 | Free cash flow | 23,876,160.00 | 0.5717532 | 13,651,271.97 |
| 5 | Free cash flow | 25,786,252.80 | 0.4971767 | 12,820,324.98 |
| 5 | Value of firm | 303,704,755.20 | 0.4971767 | 150,994,938.68 |
| Value of firm today | 221,174,992.94 | |||
| Number of shares | 6,000,000.00 | |||
| Share price | 36.86 | |||
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