CORPORATE VALUATION Scampini Technologies is expected to generate $75 million in

Question

CORPORATE VALUATION

Scampini Technologies is expected to generate $75 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 40 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.

Each share of common stock is worth $________ , according to the corporate valuation model.

CORPORATE VALUATION

Scampini Technologies is expected to generate $75 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 40 million shares of stock outstanding, what is the stock's value per share? Round your answer to two decimal places.

Each share of common stock is worth $________ , according to the corporate valuation model.

Explanation / Answer

Current total value=FCF for next period/(WACC-Growth rate)

=75/(0.11-0.06)

=$1500 million

Hence each share is worth=(1500/40)=$37.5

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