Question

The present value of JECK​ Co.'s expected free cash flow is $ 93 million. If JECK has $ 34 million in​ debt, $ 7 million in​ cash, and 3.6 million shares​ outstanding, what is its share​ price? g

Answer 1

Answer:

$18.33 million shares price

Explanation:

Calculation for the share price

The present value of JECK Co.'s expected free cash flows is $100 million. If JECK has $30 million in debt, $6 million in cash, and 2 million shares outstanding, what is its share price?

First step is to find the MVE by using this formula

MVE= EV-D+C

= 93-34+7

=$66 million

Second step is to find the Po using this formula

Po =MVE/ Number of shares outstanding

= $66/3.6 million shares

= $18.33 million

Therefore the share outstanding will be $18.33 million shares price