Next year, Merry Meerkat is expected to earn an EBIT of $$9,000,000,$ and to pay a federal$-$plus$-$state tax rate of $30\%.$ It also expects to make $$2,250,000$ in new capital expenditures to support this level of business activity, as well as $$45,000$ in additional net operating working capital $($NOWC$).$

Given these expectations, it is reasonable to conclude that next year Merry Meerkat will generate an annual free cash flow $($FCF$)$ of $($rounded to the nearest whole dollar$).$

Next, based on your estimate of Merry Meerkat's next year's FCF and making the stated assumptions, complete the following table:

Merry Meerkat can sustain this annual FCF forever,

the company has a weighted average cost of capital of $14\mathrm{.}94\%,$

the company does not currently own any marketable securities$,$

there are $67,500$ shares of Merry Meerkat outstanding

the company's value of debt is $45\%$ of its total entity value, and

the company's value of preferred shares is $25\%$ of its total entity value.

Attributes of Merry Meerkat

Value

Total Entity Value

Value of Common Equity

Intrinsic value $($per share$)$