Free cash flow valuation???Nabor Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public? offering, managers at Nabor have decided to make their own estimate of the?firm's common stock value. The? firm's CFO has gathered data for performing the valuation using the free cash flow valuation model.

The? firm's weighted average cost of capital is

14 %14%?,

and it has

$ 2 comma 170 comma 000$2,170,000

of debt at market value and

$ 430 comma 000$430,000

of preferred stock at its assumed market value. The estimated free cash flows over the next 5? years, 2016 through? 2020, are given in the? table,

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. Beyond 2020 to? infinity, the firm expects its free cash flow to grow by

5 %5%

annually.

a.??Estimate the value of Nabor? Industries' entire company by using the free cash flow valuation

model.

b.??Use your finding in part

a?,

along with the data provided? above, to find Nabor? Industries' common stock value.

c.??If the firm plans to issue

200 comma 000200,000

shares of common? stock, what is its estimated value per? share?

CASH FLOW

2016 $280,000

2017 $330,000

2018 $400,000

2019 $460,000

2020 $500,000