What is the most to pay per share for the stock now


You are considering buying common stock in Grow On, Inc. You have calculated that the firm's free cash flow was $7.60 million last year. You project that free cash flow will grow at a rate of 5.0% per year indefinitely. The firm currently has outstanding debt and preferred stock with a total market value of $22.23 million. The firm has 2.94 million shares of common stock outstanding. If the firm's cost of capital is 19.0%, what is the most you should pay per share for the stock now?

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Finance Basics: What is the most to pay per share for the stock now
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