the present value of all the expected future free cash flow

the present value of all the expected future free cash flow of your firm is $320 million. the firm has $170 million of debt, and a cash balance of $30 million. If there are 13 million shares outstanding, what is the price of each share of this firm?

Solution

Share price = present value of cash flows/shares outstanding

Share price = 320/13

Share price = 24.62

the present value of all the expected future free cash flow of your firm is $320 million. the firm has $170 million of debt, and a cash balance of $30 million.

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