1. HighFive had a FCFF of $12M last year and has 5.25M shares outstanding. HighFive's required return on equity is 12% and WACC is 10.1%. HighFive's outstanding debt has a market value of 64M. If FCFF is expected to grow at 4% forever, calculate the intrinsic value of HighFives shares.
2. Toning Tech expects earnings per share of $3.21 next year. Current book value is $5.1 per share. The appropriate discount rate for Toning Tech is 15 percent. What is the current value of Toning Tech's stock if earnings grow at 5 percent forever?
3. Communications is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 15 percent a year for the next 3 years and then decreasing the growth rate to 3.5 percent per year. The company just paid its annual dividend in the amount of $0.55 per share. What is the current value of this stock if the required rate of return is 12.5 percent?