11. More on the corporate valuation model

Smith and T Co. is expected to generate a free cash flow (FCF) of $8,465.00 million this year (FCF = $8,465.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Smith and T Co.s weighted average cost of capital (WACC) is 7.38%, what is the current total firm value of Smith and T Co.? (Note: Round all intermediate calculations to two decimal places.)

$232,295.31 million

$281,283.30 million

$26,585.54 million

$278,754.37 million

Smith and T Co.s debt has a market value of $174,221 million, and Smith and T Co. has no preferred stock. If Smith and T Co. has 525 million shares of common stock outstanding, what is Smith and T Co.s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)

$109.62

$110.62

$121.68

$331.85