You Must Estimate the Intrinsic Value of Noe Technologies' Stock

question 2

Multiple Choice

You must estimate the intrinsic value of Noe Technologies' stock.The end-of-year free cash flow (FCF₁) is expected to be $24.50 million,and it is expected to grow at a constant rate of 7.0% a year thereafter.The company's WACC is 10.0%,it has $125.0 million of long-term debt plus preferred stock outstanding,and there are 15.0 million shares of common stock outstanding.What is the firm's estimated intrinsic value per share of common stock?

• A) $47.96
• B) $46.11
• C) $38.27
• D) $40.12
• E) $34.58

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Definitions:

Buying and Selling

The basic components of commerce involving the exchange of goods or services for money or other goods between parties.

Goods and Services

This term describes the combination of tangible products and intangible activities provided to fulfill consumer needs and desires.

Primary Activities

Fundamental functions and processes conducted by a business that directly relate to the creation, sale, maintenance, and support of a product or service.

Add Value

The process of increasing the worth of a product or service, often by improving quality, enhancing features, or improving its appeal.