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5. (10 Points) Aeroshopper Corporation is a fast-growing supplier of drones that can deliver food and groceries. Analysts project the following free cash flows during
5. (10 Points) Aeroshopper Corporation is a fast-growing supplier of drones that can deliver food and groceries. Analysts project the following free cash flows during the next 3 years: Year 1: -$30 million; Year 2: $20 million; Year 3: $25 million. Immediately following Year 3, Aeroshopper's free cash flow is expected to grow at a constant 4% rate. Suppose Aeroshopper has $15 million in marketable securities, $30 million in debt. $5 million in preferred stock, and 6 million shares of common stock Aeroshopper's WACC is 20%. (a) What is the current total firm value? (b) What is the intrinsic value per share of common equity
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