General Industries Is Expected to Generate the Above Free Cash

General Industries is expected to generate the above free cash flows over the next five years, after which free cash flows are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 9% and General Industries has cash of $15 million, debt of $45 million, and 80 million shares outstanding, what is General Industries' expected current share price?

A) $7.78
B) $8.17
C) $9.34
D) $11.67

Correct Answer:

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