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Atchley Corporation's Last Free Cash Flow Was $1

Question 25

Multiple Choice

Atchley Corporation's last free cash flow was $1.55 million.The free cash flow growth rate is expected to be constant at 1.5% for 2 years, after which free cash flows are expected to grow at a rate of 8.0% forever.The firm's weighted average cost of capital (WACC) is 12.0%.Atchley has $2 million in short-term debt and $14 million in debt and 1 million shares outstanding.What is the best estimate of the intrinsic stock price?


A) $25.05
B) $26.16
C) $27.30
D) $28.48
E) $29.70

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