Consider the case of Soggy Otter Manufacturing:

Next year, Soggy Otter is expected to earn an EBIT of $11,000,000, and to pay a federal-plus-state tax rate of 30%. It also expects to make $2,750,000 in new capital expenditures to support this level of business activity, as well as $15,000 in additional net operating working capital (NOWC).

Given these expectations, it is reasonable to conclude that next year Soggy Otter will generate an annual free cash flow (FCF) of

_________________________

(rounded to the nearest whole dollar).

Next, based on your estimate of Soggy Otters next years FCF and making the stated assumptions, complete the following table:

	Soggy Otter can sustain this annual FCF forever,
	the company has a weighted average cost of capital of 13.86%,
	the company does not currently own any marketable securities,
	there are 22,500 shares of Soggy Otter outstanding
	the companys value of debt is 45% of its total entity value, and
	the companys value of preferred shares is 25% of its total entity value.

Attributes of Soggy Otter	Value
Total Entity Value
Value of Common Equity
Intrinsic value (per share)