JP Inc. had the following information expressed in millions of $:

2019 2020

Net Fixed Assets 2,000 2,500

After Tax Operating Income 700 925

Net Income 600 825

a. Calculate the free cash flow to the firm (FCFF) for the year 2020. If some information is not given to you, assume it to be 0.

b. The growth rate of GDP is estimated to be on average 2.5% in the next few years. JP inc has a capital structure of 40% Debt and 60% Common Stock (Equity). Cost of debt prior to taxes is estimated to be 5% and cost of equity is estimated to 13%. Tax rate is estimated to be 35%. Based on this information and your solution in 18.a estimate the intrinsic value for this firm.