Market place inc has current sales of $8,000 in millions, an operating ratio of 5% a capital requirement ratio of 30% a tax rate of 40% and a corporate cost of capital of 10%. Under new management sales are expected to grow 20% in year 1, 15% in year 2, 8% in year 3, 4% in year 4 and then grow at a constant rate of 4% after year 4. In addition the firm has the following balance sheet items:

Please help with Parts A, B and C. Thank you!!

(000,000)

Short term investments = $50

Short term debt notes payable = $200

Long term debt bonds = $500

Preferred stock = $0

Number of shares of common stock = 100

1. What is the firms free cash flow at the end of year 1?

Options: $128.96, $34.77, $0, $67.5, $81

2. What is the firms horizon value at the end of year 4?

Options: 13,011, 9,035, 12,198, 8,267

3. What is the firms current equity value of price per share?

Options: 46.91, 85.65, 150.26, 56.7