1.You are trying to value the common stock of a firm that doesn't currently pay dividends and you don't expect it to pay dividends any time in the near future, so you have decided to use the free cash flow approach. This firm has issued some bonds which are due to mature in 20 years with a face value of $10 million and a coupon rate of 5.00%. According to Bloomberg, their yield to maturity is 5.50%. Based on your careful analysis of this firm, you expect it to generate $8 million in free cash flow during the current year (assume it all comes at the end of the year). You expect that number to grow at a rate of 4% per year forever. You have decided to discount the free cash flow at a rate of 12%. If the firm has 1.2 million shares of common stock outstanding and no cash on hand, please answer the following questions: What is the market value of the firm's debt, what is the firm's enterprise value, and what should be the price of one share of stock?

Market Value of Debt ___________________

Enterprise Value __________________

Price of one share of stock ________________