Happy Fliers Aviation Inc.$\text{'}$s free cash flows $($FCFs$)$ are expected to grow at a constant long$-$term growth rate $(g_L)$ of $20\%$ per year into the future. Next

year, the company expects to generate a free cash flow of $$9,500,000.$ The market value of Happy Fliers's outstanding debt and preferred stock is

$$42,750,000$ and $$23,750,000,$ respectively. Happy Fliers has $7,500,000$ shares of common stock outstanding, and its weighted average cost of capital

$($WACC$)$ is $30\%.$

Given the preceding information, complete the adjacent table $($rounding each value to the nearest whole dollar$),$ and assuming that the firm has not

had any nonoperating assets in its balance sheet.

Term

Value

Value of Operations

Value of Firm's Common Equity

Value of Common Stock $($per share$)$

Oops, a more careful review of Happy Fliers's balance sheet actually reports a $$2,370,000$ portfolio of marketable securities$.$ How does this new

information affect the intrinsic value of Happy Fliers's common equity $($expressed on a per$-$share basis$)$ assuming no other changes to the Happy Fliers

financial situation? Review the statements below and select those that accurately describe Happy Fliers's financial situation. Check all that apply.

The intrinsic value of Happy Fliers's common stock increa ses with the inclusion of the company's marketable securities portfolio into the

analysis.

The intrinsic value of Happy Fliers's common stock decreases with the inclusion of the company's marketable securities portfolio into the

analysis.

The revised intrinsic value of Happy Fliers's common stock is $$4\mathrm{.}12$ per share.

The intrinsic value of the company's common stock isn't affected by the new information.