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CFA Level 2
Equity Investments

Valuing XYZ Corporation's Equity Using FCF

Hard Equity Valuation Applications Free Cash Flow Valuation

XYZ Corporation is expected to generate the following free cash flows for the next five years: $10 million, $12 million, $14 million, $16 million, and $18 million. After Year 5, the company expects to grow its free cash flows at a constant rate of 3% indefinitely. The company has a weighted average cost of capital (WACC) of 9%.

Using the Free Cash Flow Valuation method, what is the value of XYZ Corporation's equity per share, assuming there are 5 million shares outstanding? Round your answer to the nearest whole dollar.

Hint

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