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An analyst is considering investing in Kraft Heinz; a stock that generated free cash-flow (FCF)...

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Finance

An analyst is considering investing in Kraft Heinz; a stock that generated free cash-flow (FCF) of $2.6 billion last year. She estimates that earnings and FCFs will grow at a rate of -3% for the next 2 years, at 5% in the 5 years after, and at a constant rate of 4% after. She calculates the company's cost of capital at 6.25%. If the firm's non-operating assets are worth $0.6 billion, it has $32.8 billion in debt, and 1.22 billion shares outstanding, what is the analyst's fair value estimate of the company's common stock?

Select one:

a. $29.56

b. $47.19

c. $60.31

d. $63.29

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