2. Parkside Industries free cash flow (FCF) for the year just ended was $100 million. It is expected to grow at a constant rate of 5%. If the companys WACC is 15%, what is the value of operations?

__________________

3. (Continues from 2 above.) If Parkside Industries has $75 million of nonoperating assets (marketable securities), long-term debt of $125 million and $50 million of preferred stock, what is the intrinsic value of equity?

__________________

4. Given the information in 2 and 3 above, assume that Parkside Industries has 200 million shares outstanding. What is the value of each share?

__________________

5. Due to rapidly increasing sales based on new product introductions, Up-North Industries forecasts free cash flow (FCF) to grow at 14% for the next four years. After that, FCF will grow at a rate of 4% per year. Last years FCF was $170 million. If the overall cost of capital is 16%, what is the value of operations?