See Candy had a FCFE of $6.1M last year and has 2.32M shares outstanding.See's required return on equity is 10.6% and WACC is 9.3%.If FCFE is expected to grow at 6.5% forever,the intrinsic value of See's shares are ____________.
A)$108.00
B)$68.29
C)$26.35
D)$14.76
E)none of the above

Question

Quizplus · Accepted Answer

The intrinsic value per share is calculated using the Gordon Growth Model: Value = FCFE * (1 + g) / (r - g). Substituting the values: $6.1M * (1 + 0.065) / (0.106 - 0.065) = $158.44M. Dividing by 2.32M shares gives $68.29 per share.

See Candy Had a FCFE of $6