A firm's most recent free cash flow (FCFO) was $8.00 million. FCFS are expected to grow 6% a year. The firm's cost of equity is 11% and its WACC is 9%. The firm has $217.33 million in non-operating assets, $50 million in long term debt outstanding, $50 million in preferred stock, and 80 million shares outstanding. 1) What is the firm's expected value of operations today? 2) Estimate the intrinsic value of a share of the firm's stock. 3) What is the firm's expected value of operations 4 years from now?

Financial Management: Theory & Practice
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ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...
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A firm's most recent free cash flow (FCFO) was $8.00
million. FCFS are expected to grow 6% a year. The
firm's cost of equity is 11% and its WACC is 9%. The
firm has $217.33 million in non-operating assets, $50
million in long term debt outstanding, $50 million in
preferred stock, and 80 million shares outstanding.
1) What is the firm's expected value of operations
today?
2) Estimate the intrinsic value of a share of the firm's
stock.
3) What is the firm's expected value of operations 4
years from now?
Transcribed Image Text:A firm's most recent free cash flow (FCFO) was $8.00 million. FCFS are expected to grow 6% a year. The firm's cost of equity is 11% and its WACC is 9%. The firm has $217.33 million in non-operating assets, $50 million in long term debt outstanding, $50 million in preferred stock, and 80 million shares outstanding. 1) What is the firm's expected value of operations today? 2) Estimate the intrinsic value of a share of the firm's stock. 3) What is the firm's expected value of operations 4 years from now?
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