Multiple Choice
Decker Tires' free cash flow was just FCF0 = $1.32. Analysts expect the company's free cash flow to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The WACC for this company 9.00%. Decker has $4 million in short-term investments and $14 million in debt and 1 million shares outstanding. What is the best estimate of the stock's current intrinsic price?
A) $31.59
B) $32.65
C) $33.75
D) $34.87
E) $35.99
Correct Answer:
Verified
Correct Answer:
Verified
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