Grubb State Power and Light's free cash flow next year will be $100 million and it is widely expected to grow at a 4 percent annual rate indefinitely. The company's weighted average cost of capital is 10 percent, the market value of its liabilities is $1 billion, and it has 20 million shares outstanding. Estimate the price per share of Grubb's common stock.

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The Answer of Grubb State Power and Light's free cash flow next year will be $100 million and it is widely expected to grow at a 4 percent annual rate indefinitely. The company's weighted average cost of capital is 10 percent, the market value of its liabilities is $1 billion, and it has 20 million shares outstanding. Estimate the price per share of Grubb's common stock.

Grubb State Power and Light's Free Cash Flow Next Year