WACC -> Constant Growth Corporate Valuation

As a Consultant, you are hired by Blackburn Bullion and given the following information:

• Their most recent Free Cash Flow was $100 million at Year End and the firm is anticipating a constant growth rate of 5%.
• Target Capital Structure: 35% Debt and 65% Common Equity.
• The firm has a Tax rate of 40% and Yield-to-Maturity on its bonds is 7%.
• The required return on retained earnings from common stock is 11.5%. (Assume the firm will issue no new stock).

1. Find the Blackburns expected Free Cash Flow (1pt.)
2. Calculate their WACC. (1pt.)
3. Estimate the firms total Value of Operations. (3pt.)