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Brandty Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings, In other words, Brandely

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Brandty Industries invests a large sum of money in R\&D; as a result, it retains and reinvests all of its earnings, In other words, Brandely does not poy any dividends, and it has no plans to pay dividends in the near future. A major pension fund is interested in purchasing Brandtly's stock. The pension fund manager has estimated Brandty's free cash flows for the next 4 years as follows: $2 million, $7 milion, $8 million, and $15 miltion. After the fourth year, free cash flow is projected to grow at a constant 4%. Brandty's WACC is 13%, the market value of its debt and preferred stock totals $58 million; the firm has $16 milion in non-operating assets; and it has 12 million shares of common stock outstanding. a. What is the present value of the free cash flows projected during the next 4 years? Do not round intermediate calculations. Round your answer to the nearest dollar. Write out your answers completely. For example, 13 million should be entered as 13,000,000. 3 b. What is the firm's horizon, or continuing, value? Round your answer to the nearest dollac. Write out your answers completely. For example, 13 million should be entered as 13,000,000. 5 c. What is the market value of the company's operations? Do not round intermediate calculations. Round your answer to the nearest doliar. Write out your answers completely. For example, 13 million should be entered as 13,000,000. 5 What is the firm's total market value today? Do not round intermediate calculations, Round your answer to the nearest dollar. Write out your answers completely. For example, 13 million should be entered as 13,000,000. 5 d. What is an estimate of Brandty's price per share? Do not round intermed ate calculations. Round your answer to the nearest cent. 5

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