Scampini technologies is expected to generate $200 million in free cash flow next year, and fcf is expected to grow at a constant rate of 5% per year indefinitely. scampini has no debt or preferred stock, and its wacc is 11%. if scampini has 35 million shares of stock outstanding, what is the stock's value per share? round your answer to two decimal places.

The stock's value per share is $90.09.

Explanation:

In order to estimate the value of the share, first we have to estimate the value of the company at year 0 (today). We start from the FCF, that is equal to 200,000,000 (year 1). The formula of the company's value is , where g is the constant rate of grow (5%). So, the value of the company at year 1 is .

The next step is to obtain the value at year 0, with the formula . So

Finally, the stock's value per share is

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

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