Fauji Fertilizer Corporation expects to generate following free cash flows in coming 5 years...
Q No 5 Fauji Fertilizer Corporation expects to generate the following free cash flows in the coming 5 years. Year FCF (Rs. Million) 1 51 2 70 3 77 4 72 5 80 After this time period, the free cash flows will grow constantly at 3% per year. The firm's cost of capital is 13%. Using the discounted free cash flow model, calculate the following. a. What is the enterprise value of Fauji Fertilizer Ltd? (2.5 marks) b. If Fauji Fertilizer has access cash of Rs. 32 million, the debt of Rs. 280 million, and the 40 million shares outstanding and trading in the market, what should be the expected share price of Fauji Fertilizer? (2.5 marks) c. Suppose that the stocks of Fauji Fertilizer are being sold in the market at Rs. 12 per share. Will you buy that stock? why or why not? (1 mark)
in progress
Financial Analysis
2 Answer
Moiz Khalid
Login to view answer.