An analyst is trying to estimate the intrinsic value of the


An analyst is trying to estimate the intrinsic value of the stock of Harkleroad Technologies. The analyst estimates that Harkleroad’s free cash flow during the next year will be $30 million. The analyst also estimates that the company’s free cash flow will increase at a constant rate of 7.5 percent a year and that the company’s WACC is 11 percent. Harkleroad has $225 million of long-term debt and preferred stock, and 35 million outstanding shares of common stock. What is the estimated per-share price of Harkleroad Technologies’ common stock to 2 decimal places?

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Financial Management: An analyst is trying to estimate the intrinsic value of the
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