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Dozier Corporation is a fast-growing supplier of o...

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Dozier Corporation is a fast-growing supplier of office products. Calculate its terminal or horizon value, current value of operations and price per share given its FCF. Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7 percent rate. Dozier's cost of capital is WACC = 13%. Time 1 2 3 Free Cash Flows ($ millions) -$20 -$30 -$40 a. What is Dozier's terminal, or horizon, value? (Find the value of all free cash flows beyond Year 3 discounted back to Year 3) b. What is the current value of operations for Dozier? c. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the price per share?

 

Paper#5388 | Written in 18-Jul-2015

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