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    dkeane01 Posts: 1, Reputation: 1
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    May 6, 2012, 09:44 PM
    Free Cash Flows
    CEO has developed a new product that will allow its free cash flows to grow at the rate of 8% for next year, 5% for the following year, and 3% thereafter. CEOs last free cash flow was $100,000. The market value of the firm's debt is $500,000 and the market value of its preferred stock is $20,000. There are 1,000,000 shares outstanding. If an investor requires a 10% return given the risk of CEO, what would be the value of the stock?

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