Help with figuring value of a ashare of common stock!?

Question

Please help by showing me how to work the following problem and figuring the correct answer to the following:

Based on the following current information, what is the value of a share of common stock in Corporation A?

After-tax operating income = $500 million
Depreciation expense = $100 million
Capital expenditures = $200 million
No change in net working capital
Free cash flow is expected to grow by 6% per year
Cost of equity = 14%
WACC = 10%
Market value of debt = $3 billion
The company has 200 million shares of common stock outstanding

Answer 1

$123 a share.

No, seriously, the price of a share is what someone is willing to pay for it to someone who is willing to sell it. It might or might not have anything to do with the items you list.

Where in the world did you get this problem?

Answer 2

About $100 per share at a 20 p/e. All of the other numbers look in line.

Answer 3

. You can't tell from that info. A lot of stocks are valued by their PE Ratio, Price/Earnings ratio. And that is different in each 'Industry'. Like IBM's PE Ratio is different than a railroad or airline's ratio, as is McDonald's or MicroSoft's or General Motor's.
Like KKD, KRISPY KREME DOUGHNuT, once sold at a P/E of 120 @ $45. Now it's at a Zero P/E and $8 a share. The avg Industry P/E is 18. .

Answer 4

the problem you are putting before us sounds like how to deter min par value. Par Value= (assets -liabilities)/outstanding shares. Income and expenses have no barring on this number. It is figured at a given instant like close of business of last day of year.

The trading value it is trading at between a willing Bayer and a willing seller.

Answer 5

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