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Intrinsic value per share of common stock

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6. You have been assigned the task of using the free cash flow model to estimate Petry Corporation's intrinsic value. Petry's WACC is 10.00%, its end-of-year free cash flow (FCF) is expected to be $150.0 million, the FCFs are expected to grow at a constant rate of 6.00% a year in the future, the company has $200 million of long-term debt plus preferred stock, and it has 50 million shares of common stock outstanding. What is Petry's estimated intrinsic value per share of common stock?

a. $66.12
b. $68.52
c. $71.00
d. $73.49
e.76.06

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The solution explains how to determine the intrinsic value per share of common stock

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Value of equity = Value of firm - debt and preferred stock
Value of firm = PV of all free cash flows ...

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