Seaman Had a FCFE of $4

question 111

Multiple Choice

Seaman had a FCFE of $4.6B last year and has 113.2M shares outstanding. Seaman's required return on equity is 11.6%, and WACC is 10.4%. If FCFE is expected to grow at 5% forever, the intrinsic value of Seaman's shares is

• A) $646.48.
• B) $64.66.
• C) $6,464.80
• D) $6.46.

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Definitions:

Car Dealership

A business that sells new or used cars at the retail level, typically based on a dealership contract with an automaker or its sales subsidiary.

Benefits

The advantages or positive outcomes gained from a product or action.

Sunk Cost

Costs that have already been incurred and cannot be recovered, which should not affect future investment or business decisions.

Outsourcing

The practice of contracting out certain business functions or processes to a third-party provider.