Smart Draw Company Is Expected to Have Per Share FCFE

question 65

Multiple Choice

Smart Draw Company is expected to have per share FCFE in year 1 of $1.20, per share FCFE in year 2 of $1.50, and per share FCFE in year 3 of $2.00.After year 3, per share FCFE is expected to grow at the rate of 10% per year.An appropriate required return for the stock is 14%.The stock should be worth _______ today.

• A)$33.00
• B)$40.68
• C)$55.00
• D)$66.00

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