12 A company is expected to have free cash flows of $1.0 million next year. The weighted average cost of capital is WACC = 9.5%, and the expected constant growth rate is g= 5.2%. The company has $2.5 million in short-term investments, $1.8 million in debt, and 1 million shares. What is the stock's current intrinsic stock price? 13 The value of Madison Inc.'s operations is $965 million, based on the free cash flow valuation model. Its balance sheet shows $60 million in accounts receivable, $45 million in inventory, $40 million in short-term investments that are unrelated to operations, $25 million in accounts payable, $100 million in notes payable, $95 million in long-term debt, $25 million in preferred stock, $150 million in retained earnings, and $275 million in total common equity. The company has 30 million shares of stock outstanding. What is the total market value, the value of equity and the price of the stock per share? 14 A stock just paid a dividend of DO = $1.65. The required rate of return is rs = 9.5%, and the constant growth rate is g = 5.2%. What is the current stock price? 15 We are told that $52.35 per share is the current price for MacDonald Farms' stock. The dividend is projected to increase at a constant rate of 4.50% per year. The required rate of return on the stock, rs, is 8.50%. What is the stock's expected price 3 years from today? 16 If D1 = $1.45, g (which is constant) = 5.2%, and PO = $27.50, what is the stock's expected dividend yield for the coming year? 17 The Electric Company's bonds were issued several years ago and now have 18 years to maturity. These bonds have a 8.75% annual coupon, which is paid semiannually. The bond sells at $1,145. The tax rate for the firm 35%. What is the annual rate of debt before and after taxes? What number is used in the WACC calculation? 18 Overlord Inc. plans to issue a $1,000 par value, 25-year bond with a 8.00% annual coupon, paid semiannually. The cost of the bond will be $1,000/ The company's marginal tax rate is 37%, but Congress is considering a change in the corporate tax rate to 28%. Please calculate the cost of debt, using both the old and new tax rates. What is the difference between them