Suppose Maxwell, Corp. (Maxwell) a midsize, privately held company has the following data:

Five million shares outstanding.

Free cash flow of $24 million, which is expected to grow at a constant rate of 5%.

Maxwells. financial statement shows short-term investments of $100 million, preferred stock of $50 million and $200 million in long term debt.

Maxwells WACC is 11%.

Based on the above, please answer the following questions (5 points)

a) What type of claims do Maxwells stockholders have as equity investors?

b) How can Maxwell use its free cash flow?

c) What does Maxwells WACC mean?

Apply the data in question 6 and the concepts of the free cash flow valuation model to answer the following questions (20 points):

a) What is the value of the operations?

b) What is Maxwells intrinsic value?

c) What is Maxwells intrinsic value per share?