Answer questions (49) and (50) based on the information presented below. Camberly-Klark, a household product manufacturer, has 300 million common shares outstanding, trading at $50 per share. It recently reported yearly earnings per share of $4.00. The firm reported depreciation of $360 million in and capital expenditures of $625 million. The ratio of capital expenditures to depreciation is expected to remain constant and working capital needs are negligible. Camberly-Klark had debt outstanding of $10.0 billion, and intends to maintain its current financing mix of debt and common equity to finance future investment needs. The firm is expected to grow at 4% a year in perpetuity. The stock has a beta of 1.20, the equity risk premium is 6%, and the risk-free rate is 3%

49. Calculate intrinsic value per share for Camberly-Klark using the free cash flow to equity (FCFE) model. a. $55.97 b. $58.21 c. $59.95 d. $61.03

50. Assume that in an effort to block a takeover attempt that Camberly-Klark sells assets and uses the proceeds from that sale and excess cash to buy back 100 million common shares at the price of $50 per share. Calculate intrinsic value per share for Camberly-Klark using the free cash flow to equity (FCFE) model. Assume that Camberly-Klark will maintain the financing mix it secures following the share buyback. a. $86.09 b. $87.31 c. $89.53 d. $90.97