Question: An analyst makes the following forecasts of cash flows for a firm with $2 billion of debt at the end of 2006 (in millions of dollars):
2007 2008 2009
Cash flow from operations $1,460 $1,680 $1,780
Cash investment $ 580 $ 585 $ 805
The free cash flow will grow at a rate of 4% per year after 2009. The required rate of return is 10%.
Calculate the value per share of the firm if it has 2,350 million outstanding shares.