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:

Id

In psychoanalytic theory, the part of the personality structure that contains a person's basic drives and instincts, operating on the pleasure principle.

Hot Dog

A cooked sausage, traditionally grilled or steamed and served in a sliced bun as a sandwich.

Defense Mechanism

A means used by the ego to defend against anxiety and to maintain self-esteem.

Metaphor

A figure of speech in which a word or phrase is applied to an object or action to which it is not literally applicable, suggesting a similarity.