One Hour Martinizing is a fast-growing business. Analysts forecast the following free cash flows (in millions) shown below for the next 4 years, after which FCF is expected to grow at a constant 3.25% rate. Flex's WACC is

5.5%.

10 points

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Year

2

FOF

3

-275

4

125

185

225

1. What is the firm's operational value today?
2. Suppose OHM has $245 million in debt, $25 million in preferred stock, and 35 million shares of common stock outstanding. The firm has non-operating assets of $215 million (mostly land and pressing machines). Using this information to determine a per share estimate of the stock price.

B. 1 Y 5 B. 1 Y 5