$1.$ Assume that today is December $31,2023,$ and that the following information applies to J&J$,$ a relatively mature company:

$$ After$-$tax operating income $[$EBIT$(1-$T$)]$ for end of year $2023$ was $$650$ million.

$$ The depreciation expense for $2023$ was $$140$ million.

$$ The capital expenditures for $2023$ was $$225$ million.

$$ The change in net working capital from previous year $($investment in working capital$)$ was

$$30$ million.

$$ The free cash flow is expected to grow at a constant rate of $3\mathrm{.}5\%$ per year perpetually.

$$ The cost of equity is $14\%$

$$ The weighted average cost of capital $($WACC$)$ is $10\%$

$$ The market value of the company$$s debt is $$3\mathrm{.}875$ billion.

$$ J&J has $$100$ million worth of non$-$operating assets.

$200$ million shares of stock are outstanding.

a$.$ What should be the value of J&J today $($the firm$)?$

b$.$ What should be the value of JJ$$s Common Equity?

c$.$ What should be the intrinsic value of JJ$$s stock$$s price?

$2.$ From problem $1,$ assume analysts estimate that J&J$$s free cash flow is expected to grow on average, at a rate of $7\%$ per year for the next $5$ years after which growth is expected to moderate to $3\mathrm{.}5\%$ at a constant rate.

The only assumption we are changing here from problem$1$ is the expected growth in the free cash flow of the firm. With this new assumption:

a$.$ What should be the value of J&J today $($the firm$)?$

b$.$ What should be the value of JJ$$s Common Equity?

c$.$ What should be the intrinsic value of JJ$$s stock$$s price?