A company just reported the following results for its most recent fiscal year (year 0):...
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A company just reported the following results for its most recent fiscal year (year 0): Total revenues: $500 million, Operating profit margin: 4096, Tax rate: 2596, Reinvestment rate: 60%. It has $300 million debt and $2 million cash. Number of shares outstanding is 20 million. You forecast that the company will earn the same FCFF next year (FCFF1), which will then decline at a stable 4% rate (i.e., a negative growth rate) in perpetuity thereafter. You estimate that the company's cost of capital is 1196. How much would you be willing to pay for each share? O a. $1.8 b. $2.7 C. $3.9 OOOO d. $5.1 e. $6.5
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