Stock Price Assignment | Homework For You
May 28th, 2020
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines:

After-tax operating income (EBIT(1 – T)] for 2020 is expected to be $550 million.
• The depreciation expense for 2020 is expected to be $70 million.
The capital expenditures for 2020 are expected to be $325 million.
• No change is expected in net operating working capital.
• The free cash flow is expected to grow at a constant rate of 5% per year.
• The required return on equity is 15%.
• The WACC is 11%.
• The firm has $202 million of non-operating assets.
• The market value of the company’s debt is $3.572 billion. • 300 million shares of stock are outstanding.
Using the corporate valuation model approach, what should be the company’s stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. Get Finance homework help today
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