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Quiz II. Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flow during the next 3 years, after which FCF is expected to grow at a constant 8 percent rate. Dozier’s WACC is 13 percent. Time 1 2 3

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quiz ii
QuizII

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flow during the next 3 years, after which FCF is expected to grow at a constant 8 percent rate. Dozier’s WACC is 13 percent.

Time 1 2 3

FCF ($ millions) -20 30 40

  • What is Dozier’s terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.)
  • What is the value of the firm today?
  • Suppose Dozier has $100 million in debt and 10 million shares of stock. What is the price per share?