Tech, Inc, a regional technology manufacturer plans to roll out a new product to gain market share. This expansion is expected to capture a significant share of the market for the next three years. Afterwards, its free cash flows are expected to taper Tech, Inc. has just paid a cash dividend of $2.00 and is expected to increase its payout by 25% for the next three years. Afterwards, its dividends are expected to grow at 2%, indefinitely. Tech has a required return of 15%. Draw a free cash flows diagram of its dividends. What is Tech's intrinsic value? If the market value of Tech is $30, should it be purchased? Explain. A firm has forecasted free cash flows as follows: The firm has $300 mil in short term investments; $400 million in preferred stock, and $400 million in corporate bonds. There are 10 million shares of common stock outstanding. If the firm has a weighted average cost of capital bonds. 5% what is the intrinsic value of the common stock? A firm has forecasted free cash flows as follows: The firm has $500 m in short term investments; $100 million in preferred stock, and $300 million in corporate bonds. There are 20 million shares of common stock outstanding. If the firm has a weighted average cost of capital of 13%, what is the intrinsic value of the common stock