Zero Had a FCFE of $4

question 17

Multiple Choice

Zero had a FCFE of $4.5M last year and has 2.25M shares outstanding.Zero's required return on equity is 10% and WACC is 8.2%.If FCFE is expected to grow at 8% forever,the intrinsic value of Zero's shares are ____________.

• A)$108.00
• B)$1080.00
• C)$26.35
• D)$14.76
• E)none of the above

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Definitions:

Retailer

A business or person that sells goods to the consumer, as opposed to a wholesaler or supplier.

Cost

The value spent to acquire or produce something, including the amount of money, time, or resources.

Selling Price

The price at which a product or service is offered for sale to a purchaser.

Mark-up

The amount added to the cost price of goods to cover overhead and profit; the difference between the selling price and the cost price.