Question
1) Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $4,115.00 million this year (FCF = $4,115.00 million), and the FCF
1) Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $4,115.00 million this year (FCF = $4,115.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Extensive Enterprise Inc.s weighted average cost of capital (WACC) is 11.70%, what is the current total firm value of Extensive Enterprise Inc.? (Note: Round all intermediate calculations to two decimal places.)
2) Extensive Enterprise Inc.s debt has a market value of $55,406 million, and Extensive Enterprise Inc. has no preferred stock. If Extensive Enterprise Inc. has 750 million shares of common stock outstanding, what is Extensive Enterprise Inc.s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
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