Patrick Company Expects to Generate Free Cash Flow of $120,000

question 158

Multiple Choice

Patrick Company expects to generate free cash flow of $120,000 per year forever.If the firm's required return is 12 percent,the market value of debt is $300,000,the market value of preferred stock is $70,000,and the company has 100,000 shares of stock outstanding.What is the value of Patrick's stock?

• A)$6.30
• B)$10.00
• C)$7.00
• D)$9.70

---

Definitions:

American Freedom

The ideals and practices of liberty, rights, and democracy that are foundational to the United States and its national identity.

Military Regimes

Governments run by military forces, often established after a coup d'état, where civilian rule is suspended or limited.

Democratic Governments

Systems of government where power is vested in the people, who rule either directly or through freely elected representatives, characterized by free and fair elections, protection of human rights, and the rule of law.

Nixon-Khrushchev Debate

A series of impromptu exchanges between U.S. Vice President Richard Nixon and Soviet Premier Nikita Khrushchev in 1959, highlighting the tensions and ideological differences between the U.S. and the Soviet Union during the Cold War.