SGA Consulting Had a FCFE of $3

question 58

Multiple Choice

SGA Consulting had a FCFE of $3.2M last year and has 3.2M shares outstanding. SGA's required return on equity is 13%, and WACC is 11.5%. If FCFE is expected to grow at 8.5% forever, the intrinsic value of SGA's shares is

• A) $21.60.
• B) $26.56.
• C) $244.42.
• D) $24.11.

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Definitions:

Positioning Stage

The phase in marketing where a brand defines and communicates its unique value proposition and how it differs from competitors to target consumers.

Commoditization

The process where products become indistinguishable from each other in the eyes of the consumer, leading to competition primarily on price.

Protectionism

Protectionism is an economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations.

Exploitation

The act of making use of resources or advantages for one's own benefit, often without regard for ethics or fairness.