Peter is an analyst at Holt Investment and he has been directed by his supervisor to determine the value of Holt Construction Company. Peter reviewed Holt's financial statement and forecasts it's free cash flows over the next five years are as follows:

Year 2015 2016 2017 2018 2019 Free cash flow $400,000 300,000 550,000 450,000 400,000 Peter believes that the FCF will cease to grow beyond the year 2019. Furthermore, Peter calculated that the weighted average cost of capital of the firm is 7% while the market required return of equity is 13%. Holt's financial statements stated that the company's capital structure contains only debt and equity, while the market value of the debt/equity ratio is always maintained at 0.5. Holt has 1,000,000 shares of com- mon stock outstanding. a. Based on the information above, estimate the value of Holt Construction Com- pany's entire company by using the free cash flow valuation model. b. What is Holt's stock price based on your answer in part a? andchangeitsdebt/ equity ratio to 0.3, what will be the stock price next year