3. Your employer, a midsized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. Your employer is also considering the purchase of Biggerstaff & McDonald (B&M), a privately held company owned by two friends, each with 5 million shares of stock. B&M currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B&M's financial statements report short-term investments of $100 million, debt of $200 million and preferred stock of $50 million. B&M's weighted average cost of capital (WACC) is 11%. Answer the following questions: A Describe briefly the legal rights and privileges of common stockholders. B. Use B&M's data and the free cash flow valuation model to answer the following: C. What is its estimated value of operations? D. What is its estimated total corporate value (entity value)? E. What is the estimated intrinsic value of equity? F. What is its estimated intrinsic stock price per share? G. If B&M undertakes the expansion, what percent of B&M's value of operations at Year 0 is due to cash flows from years 4 and beyond (hint: use the Horizon value at t=3 of operations to help answer)? H. Based upon answer to part G (above), what are two reasons why managers often emphasize short-term earnings