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Thank you in advance! EDIT: Added cash flow table below: Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume

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EDIT: Added cash flow table below:

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Using the free cash flow valuation model to price an IPO Personal Finance Problem Assume that you have an opportunity to buy the stock of CoolTech, Inc., an IPO being offered for $15.78 per share. Although you are very much interested in owning the company, you are concerned about whether it is fairly priced. To determine the value of the shares, you have decided to apply the free cash flow valuation model to the firm's financial data that you've accumulated from a variety of data sources. The key values you have compiled are summarized in the following table, a. Use the free cash flow valuation model to estimate CoolTech's common stock value per share. b. Judging by your finding in part a and the stock's offering price, should you buy the stock? c. On further analysis, you find that the growth rate in FCF beyond 2023 will be 5% rather than 4%. What effect would this finding have on your responses in parts a and b? a. The value of CoolTech's entire company is $. (Round to the nearest dollar.) Free cash flow Year (t) FCF 2020 $750,000 2021 $860,000 2022 $990,000 2023 $1,100,000 Other data Growth rate of FCF, beyond 2023 to infinity = 4% Weighted average cost of capital = 8% Market value of all debt = $4,810,000 Market value of preferred stock = $1,920,000 Number of shares of common stock to be issued = 1 1,100,000

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