Free cash flow valuationNabor 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

13 %

and it has

$2,480,000

of debt at market value and

$500,000

of preferred stock at its assumed market value. The estimated free cash flows over the next 5 years, 2016 through2020, are given in the table,

Year (t)	Free cash flow (FCF)
2016	$250,000
2017	$300,000
2018	$370,000
2019	$440,000
2020	$520,000

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

5 %

annually.

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

model.

a.The value of Nabor Industries' entire company is

$ 4,969,043 nothing

b.Use your finding in part

a,

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

b.The value of Nabor Industries' common stock is

$ ? nothing.

(Round to the nearest dollar.)