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Business, 15.04.2020 17:38 moldybubblegum11

A company just reported the following results for its most recent fiscal year (year 0): Total revenues: $500 million, Operating profit margin: 40%, Tax rate: 25%, Reinvestment rate: 60%. It has $300 million debt and $2 million cash. Number of shares outstanding is 20 million. You forecast that the company will earn the same FCFF next year (FCFF1), which will then decline at a stable 4% rate (i. e., a negative growth rate) in perpetuity thereafter. You estimate that the company's cost of capital is 11%. How much would you be willing to pay for each share?a.$1.8b.$2.7c.$3.9d.$5.1d.$6. 5

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