You estimate the market value of the company. The value of the firm if it were unlevered is $600 million. The company has long-term debt $20 million. Assume the company will increase the debt to $25 million for next year, $28 million for one year after and $30 million for two-year after. After that, the company will keep debt level as $30 million for the remaining future. Company’s corporate tax rate is 20% and the current cost of debt is 5%. Both will remain the same as current year in the future. what is the current stock price per share?
Enjoy 24/7 customer support for any queries or concerns you have.
Phone: +1 213 3772458
Email: support@gradeessays.com