The market value of a firm is equal to the present value of its expected future free cash flows plus the market value of its non-operating assets: ofcompanyMarketvalue=(1+WACC)1FCF1+(1+WACC)2FCF2++(1+WACC)FCF+Marketvalueofcompanysnon-operatingassets the continuing value of the firm's operations at that date is: Horizonvalue=VCompanysoperationsatt=N=FCFN+1/(WACCgFCF) subtracted to arrive at the market value of equity. The market value of equity is divided by the number of common shares outstanding to estimate the firm's intrinsic per-share value. \$ per share THide Feedback Correct Check My Work Feedback Realize that the correct valuation model is the corporate valuation model. common stock. Quantitative Problem 2: Hadley Inc. forecasts the year-end free cash flows (in millions) shown below. firm has zero non-operating assets. What is the value of the stock price today (Year 0 )? Round your answer to the nearest cent. Do not round intermediate calculations. $ per share According to the valuation models developed in this chapter, the value that an investor assigns to a share of stock is dependent on the length of time the investor plans to hold the stock. The statement above is Conclusions