# Estimated intrinsic value per share of common stock?

Intrinsic value: Portman Industries just paid a dividend of \$1.92 per share. The company expects the coming year to be very profitable, and its dividend is expected to grow by 16.00% over the next year. After the next year, though, Portman’s dividend is expected to grow at a constant rate of 3.20% per year.

Assuming that the market is in equilibrium, use the information just given to complete the table. Term Value Dividends one year from now (D:) Horizon value (P) Intrinsic value of Portman’s stock The risk-free rate (TRF) is 4.00%, the market risk premium (RPM) is 4.80%, and Portman’s beta is 2.00.

What is the expected dividend yield for Portman’s stock today? 8.33% 10.41% 11.45% 10.08% Globo-Chem Co. is expected to generate a free cash flow (FCF) of \$1,570.00 million this year (FCF1 = \$1,570.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF2 and FCF3).

After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF-). Assume the firm has no non-operating assets. If Globo-Chem Co.’s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Globo-Chem Co.? (Note: Round all intermediate calculations to two decimal places.) O \$28,185.35 million \$33,822.42 million O \$37,415.58 million \$4,738.66 million Globo-Chem Co.’s debt has a market value of \$21,139 million, and Globo-Chem Co. has no preferred stock. If Globo-Chem Co. has 675 million shares of common stock outstanding, what is Globo-Chem Co.’s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.) O \$10.44 \$9.44 \$11.48 \$31.32

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