Use the Information for the Question(s)below

question 45

Multiple Choice

Use the information for the question(s) below.
You expect CCM Corporation to generate the following free cash flows over the next five years: Following year five,you estimate that CCM's free cash flows will grow at 5% per year and that CCM's weighted average cost of capital is 13%.
-If CCM has $200 million of debt and 8 million shares of stock outstanding,then the share price for CCM is closest to:

• A)$49.50.
• B)$12.50.
• C)$19.35.
• D)$24.50.

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Definitions:

Epictetus

A Greek Stoic philosopher who emphasized the importance of personal freedom and responsibility in achieving happiness.

Hedonism

A philosophical theory suggesting that pleasure or happiness is the highest good and utmost aim of human life.

Epicurus

An ancient Greek philosopher who founded Epicureanism, a philosophy that taught the pursuit of happiness through the elimination of pain and fear, emphasizing simple pleasures, friendship, and a contemplative life.

Exponent

A person who believes in and promotes the truth or benefits of an idea or theory.