Dernham Inc. has an expected net operating profit after taxes, EBIT (1-T), of $10,000 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,500 milllion, and net operating working capital (NOWC) is expected to increase by $45 million. How much free cash flow (FCF) is Derhham Inc. expected to generate over the next year?

(Using the preceding information and the FCF you calcuated in the previous question, calculate the appropriate values below. HINT: You can assume that the firm does not have any nonoperating assets on its balance sheet)

a. 11,455

b. 8,455

c. 342,226

d. 8,545

2. Derhham Inc.'s FCFs are expected to grow at a constant rate of 2.10% per year in the future. The market value of Dernham Inc.'s oustanding debt is $90,589 million, and perferred stocks' value is $50,327 million. Derhman Inc. has 675 million shares of common stock oustanding, and its weighted average cost of capital (WACC) equals 6.30%.

a. What is the total firms value______

b. Value of common equity_____

c. Intrinisic value per share_____