Corporate Valuation
Today is December 31, 2017. Use the following information that applies to Samppel Corporation to calculate what should be the company’s stock price today. (Corporate Valuation Method)
After-tax operating income [EBIT(1 – T)] for 2016 is expected to be $1,150 million
The depreciation expense for 2016 is expected to be $110 million
The capital expenditures for 2016 are expected to be $650 million
No change is expected in net working capital
The free cash flow is expected to grow at a constant rate of 7% per year
The required return on equity is 15%
The WACC is 9%
The market value of the company’s debt is $3.5 billion 300 million shares of stock are outstanding.