Acompany is projected to have a free cash flow of $329 million next year, growing at a 5.7% rate until the end of year 3.

after that, cash flows are expected to grow at a stable rate of 2.1%.

the company's cost of capital is 13.3%.

the company owes $64 million to lenders and has $18 million in cash.

if it has 214 million shares outstanding, what is your estimate for its stock price? round to one decimal place.

$14.35

Explanation:

Firstly, we need to calculate enterprise value (EV) of this company, which is equal to present value of all free cashflows (CF):

Secondly, we calculate equity value as below:

EV = Equity value + Net debt = Equity value + (Debt - Cash), or:

3,117.91 = Equity value + (64 - 18), or  Equity value = $3,071.91.

Finally, stock price of the company = Equity value/Number of shares = 3,071.91/214 = $14.35.

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