1. XYZ Corporation, Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$12 million (negative), but its FCF at t = 2 will be $35 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 13%, what is the firm's value of operations, in millions?Note: Enter your answer rounded off to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

2. The Island Hotel Company, Inc. just paid a dividend of $1.50 per share, and that dividend is expected to grow at a constant rate of 6.00% per

year in the future. The company's beta is 1.95, the market risk premium is 6.25%, and the risk-free rate is 2.50%. Using CAPM, at what price

should the company's stock sell? Note: Enter your answer rounded off to the nearest cent. Do not enter $ or comma in the answer box.

For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

3.Big Manufacturer, Inc.s perpetual preferred stock has an annual dividend of $7.50 per share and is selling in the market for $85.00 per share. If your required return on this preferred stock is 8.0%, what is the intrinsic value of this preferred stock?Note:Enter your answer rounded off to the nearest cent. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.

4. ABC Corporation's bonds have a 10-year maturity, a 5.75% coupon rate with interest paid semiannually, and a par value of $1,000. If your

nominal required rate of return on these bonds is 8.50%, what is the maximum price you should be willing to pay for the bond?

Note:Enter your answer rounded to the nearest cent. Do not enter $ or comma in the answer box. For example, if your answer is

$12,300.456 then enter as 12300.46 in the answer box.