Question #2 Your are about to launch a new fitness video straming company called FitFlix. You expect to generate the following FCF by year: Today = $0, Year 1 = $10m, Year 2 = $18m, Year 3 = $40m After year 3, you expect constant growth at 5%. The required return from your investors (WACC) is 11%. (a) What is the value of the operations BEYOND Year 3? (Said differently, what is the "constant growth value" that begins at the end of Year 3 ... using Year 4's FCF) (b) What is the market value of the company's operations ? (c) If there is $3m in non-operating assets, $50m of debt, and 25m shares of stock, what is price per share ? Question #3 You work for a luxury shoe retailer and the company wants to expand into Europe. It will require an immediate investment of $80m. You believe it will generate cash flows of $15m for 8 years. WACC for your company is 9% (a) What is the project's NPV ? Would you proceed with the project? What if WACC for your company is 12% (b) What is the Project's Payback Period