At the end of the year 2010 the CL Corporation had operating free cash flow (OFCF) of $300,000 and shares outstanding of 100,000. Total debt is currently $10,000,000. The company projects the following annual growth rates in OFCF

Year	Growth Rate
2011	25%
2012	20%
2013	15%
2014	10%
2015	12%
2016	14%
2017	16%
2018	18%

From year 2019 onward growth in OFCF is expected to remain constant at 5% per year. The stock has a beta of 1.1 and the current market price is $80. Currently the yield on 10-year Treasury notes is 5% and the equity risk premium is 4%. The firm can raise debt at a pre-tax cost of 9%. The tax rate is 25%. The proportion of equity is 55% and the proportion of debt is 45%.

Refer to Exhibit 14.8. Calculate the present value now (Year 2010) of OFCF during the

period of constant growth (that is for years 2019 onwards).

Refer to Exhibit 14.8. Calculate the total intrinsic value of the firm.

Refer to Exhibit 14.8. Calculate the intrinsic value of the stock now (Year 2010).