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(This question has two parts.) It is 2021. You are investigating the possibility of making an equity investment in Walkerville Woodworking Inc., a firm that
(This question has two parts.) It is 2021. You are investigating the possibility of making an equity investment in Walkerville Woodworking Inc., a firm that specializes in producing antique-style furniture with a modern twist Your research has revealed the following information: Walkerville has $8 million in excess cash and S4.5 million in debt. The company is expected to have free cash flow of $28 million in 2022 and $32 million in 2023. Beyond 2023, free cash flow is expected to grow at a constant rate of 2% per year forever. - Walkerville's weighted average cost of capital (WACC) is 11% and it has 7 million shares outstanding. Question A: (5 points) What is the current enterprise value of Walkerville Woodworking given the above assumptions? O A. $313.80 million OB. $321.38 million O C. $380.78 million OD. $345.55 million O E. $349.05 million Question B: (5 points) What should be the price of one share Walkerville stock? O A. $49.86 OB. $45.91 OC. $48.86 OD. $54.90 O E. $44.33
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