You Have Been Assigned the Task of Using the Corporate,or

question 52

Multiple Choice

You have been assigned the task of using the corporate,or free cash flow,model to estimate Petry Corporation's intrinsic value.The firm's WACC is 10.00%,its end-of-year free cash flow (FCF₁) is expected to be $70.0 million,the FCFs are expected to grow at a constant rate of 5.00% a year in the future,the company has $200 million of long-term debt and preferred stock,and it has 30 million shares of common stock outstanding.What is the firm's estimated intrinsic value per share of common stock?

• A) $48.80
• B) $34.40
• C) $36.80
• D) $49.60
• E) $40.00

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Definitions:

Ordinal Data

A type of categorical data with a set order or scale, but without a standard spacing between the categories.

Relative Frequency Distribution

A representation of the proportion of observations within each category of a dataset, often visualized with a histogram or pie chart.

Graphical Representation

The visual depiction of data or mathematical functions, which can include charts, graphs, diagrams, or other images to convey information visually.

Religious Preference

An individual's choice or inclination towards a particular religion or set of religious beliefs.