Compute estimated value per share


The firms weighted average cost of capital is 11% and has a $1,500,000 of debt at market value and $400,000 of preferred stock at its assumed market value. The estimated free cash flows over the next 5 years, 2013 through 2017, are given . Year 2013-free cash flow $200,000, 2014-$250,000 , 2015-$310,000, 2016-$350,000, 2017-$390,000. Beyond 2017 to infinity , the firm expects its free cash flow to grow by 3% annually a.) estimate the value of Nabor Industries'entire company by using the free cash flow valuation model. b.) use your finding in part a, along with the date provided above, to find Nabor industires' common stock. c.) If the firm plans to issue 200,000 shares of common stock, what is its estimated value per share.

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Finance Basics: Compute estimated value per share
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