Use the Information for the Question(s)below

question 96

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 $150 million of debt and 12 million shares of stock outstanding,then the share price for CCM is closest to:

• A)$49.50.
• B)$11.25.
• C)$20.50.
• D)$22.75.

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Definitions:

Specific Tariff

A fixed fee imposed on imported goods based on quantity, such as units, weight, or volume, rather than value.

Ad Valorem Tariff

A tax imposed on imported goods, calculated as a percentage of the value of the imports rather than a fixed rate.

World Price

The global market cost for a product or service, set by the overall demand and supply dynamics.

Baseballs

Spherical balls used in the sport of baseball, typically constructed from cork, rubber, yarn, and leather.