On 15 Feb 2021, AAA Company reported the following in its annual report for the year ending Dec 31, 2021 (in millions):

Short-term debt $2,000.00

Long-term debt 5,000.00

Stockholders equity 4,000.00

The short-term and long-term debt are carried on the balance sheet at approximately their market value. The firms 100 million shares traded at $50 per share when the annual report was released.

Required:

1. Calculate AAA Companys enterprise market value (the market value of the firm). (10 marks)
2. If the intrinsic value of this share on the date is $40 per share, what recommendation you would give to your clients? (10 marks)