Quantitative Problem 1: Assume today is December 31, 2019. Barrington Industries expects that its 2020 after-tax operating income [EBIT(1 - T)] will be $440 million and its 2020 depreciation expense will be $65 million. Barrington's 2020 gross capital expenditures are expected to be $120 million and the change in its net operating working capital for 2020 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.3%; the market value of the company's debt is $2.75 billion; and the company has 180 million shares of common stock outstanding. The firm has no preferred stock on its balance sheet and has no plans to use it for future capital budgeting projects. Also, the firm has zero nonoperating assets. Using the corporate valuation model, what should be the company's stock price today (December 31, 2019)? Do not round intermediate calculations. Round your answer to the nearest cent. $ per share Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. The weighted average cost of capital is 10%, and the FCFs are expected to continue growing at a 3% rate after Year 5 . The firm has $25 million of market-value debt, but it has no preferred stock or any other outstanding claims. There are 20 million shares outstanding. Also, the firm has zero non-operating assets. What is the value of the stock price today (Year 0)? Round your answer to the nearest cent. Do not round intermediate calculations. \$ per share According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock. The statement above is Conclusions Assume that it is now January 1, 2022. Wayne-Martin Electric Inc. (WME) has developed a solar panel capable of generating 200% more electricity than any other solar pan currently on the market. As a result, WME is expected to experience a 16% annual growth rate for the next 5 years. Other firms will have developed comparable technology by the end of 5 years, and WME's growth rate will slow to 5\% per year indefinitely. Stockholders require a return of 11% on WME's stock. The most recent annual dividend (D0), which was paid yesterday, was $2.00 per share. a. Calculate WME's expected dividends for 2022, 2023, 2024, 2025, and 2026. Do not round intermediate calculations. Round your answers to the nearest cent. D2022=$D2023=$D2024=$D2025=$D2026=$ b. Calculate the value of the stock today, P0. Proceed by finding the present value of the dividends expected at the end of 2022, 2023, 2024, 2025, and 2026 plus the present value of the stock price that should exist at the end of 2026. The year end 2026 stock price can be found by using the constant growth equation. Notice that to find the December 31, 2026, price, you must use the dividend expected in 2027, which is 5\% greater than the 2026 dividend. Do not round intermediate calculations. Round your answer to the nearest cent. $ c. Calculate the expected dividend yield (D1/P0), capital gains yield, and total return (dividend yield plus capital gains yield) expected for 2022 . (Assume that P0=P0 anc recognize that the capital gains yield is equal to the total return minus the dividend yield.) Do not round intermediate calculations. Round your answers to two decimal places. D1/P0=% Capital gains yield =% Expected total return =% Then calculate these same three yields for 2027. Do not round intermediate calculations. Round your answers to two decimal places. D6/P5=% Capital gains yield =%