Use the Information for the Question(s)below

question 77

Essay

Use the information for the question(s)below.
You expect DM Corporation to generate the following free cash flows over the next five years: Beginning with year six,you estimate that DM's free cash flows will grow at 6% per year and that DM's weighted average cost of capital is 15%.
-If DM has $500 million of debt and 14 million shares of stock outstanding,then what is the price per share for DM Corporation?

---

Definitions:

Future Use

Refers to resources or assets that are intended to be utilized in upcoming periods, not immediately.

Payments

Monetary transactions involving the transfer of funds to fulfill a debt or obligation.

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, giving them partial ownership of the company.

Dividends

Payments made by a corporation to its shareholder members, usually in the form of cash or stock, representing a share of the corporate profits.