dernham Inc. has an expected net operating profit after taxes, EBIT (1-T), of $11,600 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,740 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow (FCF) is dernham Inc. expected to generate over the next year?

a.263,285 mil

b.9870 mil

c.9850mil

d.13330mil

Dernham Inc.'s FCFs are expected to grow at a constant rate of 3.18% per year in the future. The market value of Dernham Inc.'s outstanding debt is $69,693 million, and preferred stocks' value is $38,719 million. Dernham Inc. has 150 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 9.54%. Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table.( You can assume that the firm does not have any noperating asssets on its balance sheet.

Term Value (Millions)

2a. Total Firm Value

2b. Value of Common Equity

2c. Intrinsic value per share