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dez dez
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3 years ago
Overhill Railroads is expected to generate free cash flow of $90 million next year. (Assume that free cash flow is paid at the end of each year and we are at the beginning of a year.) After that, free cash flow is forecast to go grow at 1.20% per annum in perpetuity. The WACC for Overhill Railroads is 11%. The firm has 20.75 million shares outstanding and the market value of its debt is $100 million. What is the fair price for Overhill Railroads' shares today?

▸ $35.53

▸ $36.33

▸ $39.44

▸ $41.11

▸ $44.26
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
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works123works123
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3 years ago
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dez Author
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3 years ago
Helped a lot
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Just got PERFECT on my quiz
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Thank you, thank you, thank you!
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