HCB, Inc. just had free cash flows of $4.00 million (FCF0). Free cash flows are expected to grow at a rate of 6.0% forever. It also has the following financial information:
Market value of HCB Debt = $30.00 million
Short-term investments = $15.00 million
Book value of equity = $60.00 million
Total Assets = $80.00 million
Shares outstanding = 1.50 million
Required return on stock = 11.0%
WACC = 9.0%
Calculate HCB's intrinsic value per share.
a. $66.54
b. $69.06
c. $78.33
d. $80.85
e. $84.22