Go Times Inc. has current sales of $7,500 (in millions), an operating ratio of 6%, a capital requirement ratio of 40%, a tax rate of 40% and a corporate cost of capital of 8%. Under new management sales are expected to grow 15% in Yr 1, 15% in Yr 2, 10% in Yr 3, 5% in Yr 4 and then grow at a constant rate of 4% after Yr 4.

In addition, the firm has the following balance sheet items: (000,000)

Short-term investments = $25

Short-term debt (notes payable) = $250

Long-term debt (bonds) = $300

Preferred stock = $30

Number of shares of common stock = 75 1.

What is the firm’s free cash flow at the end of Yr 1?

What is the firm’s horizon value at the end of Yr 4? 

• $13,011.28 
• $9,035.50 
• $12,198.08
• $14,637.70 
• $8,326.23

3. What is the firm’s total value today? Group of answer choices 

• $10,312.54
• $9,669.57 
• $12,308.94 
• $11,598.48 
• $11,228.96

4. What is the firm’s current equity value of price per share? 

• $146.91 
• $115.85 
• $150.26 
• $129.77 
• $121.19