#13

13. (Free Cash Flow Model) A firm has forecasted free cash flows as follows: Year Free Cash Flows (Smillions) 100 -250 250 -300 350 Beyond year 5, FCFs are expected remain flat indefinitely. The firm has $500 mil in short tel investments; $100 million in preferred stock, and $300 million in corporate bonds. There are 20 million shares of common stock outstanding. If the firm has a weighted average cost of capital of 13%, what is the intrinsic value of the common stock