Save Submit Assignment for Grading Questions Problem 915 4 Question 18 of 20 16.

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Save Submit Assignment for Grading Questions Problem 915 4 Question 18 of 20 16. C Check My Work Click here to read the eBook: Enterprise-Based Approach to Valuation CORPORATE VALUATION 19. O antzler Corp 20. Year $19 $2741 FCF (S millions) a. What is Dantzler's horizon, or continuing, value? (Hint: Find the value of all free cash flows beyorid Year 3 discounted back to Year 3.) Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55 s620.85 million b. What is the firm's value today? Round your answer to two decimal places. Enter your answer in millions. For example, an answer of $13,550,000 should be entered as 13.55. Do not round your intermediate 496.65 milion C. Suppose Dantzler has $98 million of debt and 19 million shares of stock outstanding. What is your estimate of the current price per share? Round your answer to two decimal places. Write out your answer completely. for example, 0.00025 milion should be entered as 250. s298.66 3 Hide Feedback Partially Correet

Explanation / Answer

a) Continuing value = 41*(1+6%)/(13%-6%) = 620.85 M

b) Firms Value = -19/(1.13) + 27/1.13^2 + 41/(1.13)^3 + 620.85/(1.13)^3 = $ 463.02 Million

c) Total Firm Value = $ 463.02 Million

Total Debt = $ 98 M

So Equity value = 463.02-98 = $ 365.02 Million

Price Per Share = 365.02/19 = $ 19.21

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