Quantitative Problem 21 Hadley Inc forecasts the year and free cash flows (in Millions) shown below. 2 Year FCF 1 3 5 -$22 5433 $51.9 $56.6 The weighted average cost of capital is 10%, and the FCs are expected to continue growing at a 4% rate after Year 5. The firm has $26 million of market value debt, but it has no preferred stock or any other outstanding claims. There are 18 million shares outstanding. Also, the firm has zero non operating assets. What is the value of the stock price today Year 07 Round your answer to the nearest cont. Do not round Intermediate calculations. per share According to the valuation moden developed in this chapter, the value that an investor asigns to a share of stock is dependent on the length of time the investor plans to hold the stock 3 The statement above is Conclusions Analysts use both the discounted dividend model and the corporate valuation model whan valuing mature, dividend paying firma; and they generally use the corporate model when valuing divisions and firms that do not pay dividends. In principle, we should find the same intrinsic value using either model but differences are often observed Even if a company is paying steady dividends, much can be lamed from the corporate model to analysts today use it for all types of valuations. The process of projecting future Financaltaments can reveal a great deal about a company's operations and financing needs. Also, such an analysis can provide insights into actions that might be taken to Increase the company's values and for this reason, it is integral to the planning and forecasting process