General Industries Is Expected to Generate the Above Free Cash

question 27

Multiple Choice

General Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 9% and General Industries has cash of $15 million, debt of $45 million, and 80 million shares outstanding, what is General Industries' expected current share price?

• A)$7.78
• B)$8.17
• C)$9.34
• D)$11.67

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Definitions:

Mental Processes

Internal operations of the mind such as thinking, remembering, feeling, and perceiving that underlie individual human behaviors and experiences.

Psychological Disorders

Mental disorders characterized by disturbances in thought, emotion, or behavior, significantly impairing personal functioning.

Religiously Involved

Participating in or committed to religious practices or institutions with regularity and devotion.

Pineal Gland

A small endocrine gland in the brain that produces melatonin, a hormone that regulates sleep-wake cycles.