Assume that you have an opportunity to buy the stock if CoolTech, Inc., an IPO being iffered for $8.66 per share. Although you are very much interest in owning the company, you are concerned about whether it is faily priced. To determine the value if the shares, you decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated frim a variety of data sources. The key values you have compiled are summarized in the following table,

Year (t) FCF

2020. $690,000

2021. $820,000

2022. $940,000

2023. $1,030,000

Other Data:

Growth rate of FCF, beyond 2023 to infinity =6%

Weighted average cost of capital =12%

Market Value of all debt =$2,830,000

Market value of perferred stock =$1,130,000

Number of shared of common stock to be issued =1,100,000

Questions:

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