Intro

Majong Inc. forecasts that it will have the free cash flows shown below. The free cash flows are expected to grow by 3% per year after year 3.

Year	1	2	3
PCF ($ million)	-20	48	54

The weighted average cost of capital is 10%. The firm has $65 million of debt and 10 million shares outstanding.

Attempt 1/3 for 7.5 pts.

Part 1

What is Majong's horizon value (in $ million)?

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Attempt 1/3 for 7.5 pts.

Part 2

What is the firm value today (in $ million)?

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Attempt 1/3 for 7.5 pts.

Part 3

What is a good estimate of Majong's intrinsic value per share?

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