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.

---

Definitions:

Copper Sulfate

A blue crystalline chemical compound of copper and sulfate ions, used in various applications such as agriculture and chemistry.

Bluing

A process used to protect steel against rust by forming a thin protective layer of magnetite (Fe3O4) on its surface.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Soda Pop

A sweetened, carbonated beverage, often flavored and containing caffeine, colours, and preservatives.