It is 2020. You are investigating the possibility of making an equity investment in Walkerville Woodworking Inc., a firm that specializes in producing antique-style furniture with a modern twist. Your research has revealed the following information:

Walkerville has $8 million in excess cash and $4.5 million in debt.

The company is expected to have free cash flow of $27 million in 2021 and $31 million in 2022.

Beyond 2022, free cash flow is expected to grow at a constant rate of 2% per year forever.

Walkervilles weighted average cost of capital (WACC) is 11% and it has 7 million shares outstanding.

Question A: (5 points)

What is the current enterprise value of Walkerville Woodworking given the above assumptions?

Question B: (5 points)

What should be the price of one share of Walkerville stock?