Problem
You are going to value a firm using the free cash flow to firm (FCFF) approach. Based on its financial statements, the current FCFF in year 0 is calculated as 9.4 million. As the firm is a leader in the industry, its FCFF is expected to grow by 16% over the next two years. After that, due to more competitors, the firm will maintain a constant growth rate of 4%. The weighted average cost of capital (WACC) is estimated to be 10.2% and the cost of equity for the firm is estimated to be 16%. The company has 3.7 million long-term debt and 13.9 million common shares outstanding.
What is the fair price of its common share (in two decimal places)?