The Saw Horse Corporation began operations in January of 2020. Presented below is selected financial information pertaining to the Saw Horse Corporation:

	2020	2021	2022
Price	28.73	29.32	30.26
EPS	1.86	2.01	2.44
FCFPS	3.66	3.31	3.96

Saw Horse Corp. currently has $11.34 per share in debt and a discount rate of 9.37 percent (a rate based upon Saw Horses asset beta).

a. Based upon the Price-Earnings ratio, estimate the expected price of Saw Horses stock. Clearly show your calculations.

b. Saw Horses most recent free-cash flow per share is $3.96. What does the FCFPS represent and how is it computed.

c. Explain how the Free Cash flow model differs from the Enterprise value model discussed in your text. Are they meant to achieve the same goal?

d. Considering the information pertaining to the Saw Horse Corporation, compute an estimate of Saw Horses expected stock price based upon free cash flows. Clearly show your calculations.

e. Saw Horses expected stock price differs (to a large extent) between the Price-Earnings and Free Cash flow models. Question what assumptions underly the use of each of these models in assessing the expected price of the stock? Would you be more comfortable using one model over the other? Explain.