Bandit corporation has 10m shares outstanding and 25m in


Bandit Corporation has 10M shares outstanding and 25M in debt and 5M in excess cash at the end of 2012. Free cash flows for Bandit Corporation were $12M in 2012. You estimate that these will grow to $14M next year in 2013 and then grow at 4% in perpetuity. Bandit’s cost of equity is 10% and its WACC is 9%.   Bandit has a share price at end of 2012 of:

a. $21.33

b. $22.00

c. $25.50

d. $26.00

e. $28.00

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Financial Management: Bandit corporation has 10m shares outstanding and 25m in
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