Answer :
Current value of a share of sundanci stock is 1.75 USD .
What is FCFE model ?
Free Cash Flow to Equity (FCFE) , After all costs, reinvestment, and debt have been paid, a company's equity shareholders are given a cash amount known as free cash flow to equity. Equity capital utilization is quantified by FCFE.
A financial solvency ratio called free cash flow yield compares the predicted free cash flow per share of a company to its market value per share. By dividing the current share price by the free cash flow per share, the ratio is determine.
[tex]FCF{t}[/tex]=[tex]OCBt[/tex]- [tex]It[/tex]
[tex]FCF{t}[/tex] = Free Cash Flow
[tex]OCBt[/tex] = Net Operating Profit After Taxes
[tex]It[/tex] = investment during period t
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