Wing Nut Corp (WNC) most recent free cash flow (FCF) was $225 million; the FCF is expected to grow at a constant rate of 3%. The rms WACC is 15%, and it has 9 million shares of common stock outstanding. The rm has $100 million in short-term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the rm has no other non-operating assets. It has $868 million in debt and $60 million in preferred stock.

a. Immediately prior to the repurchase, what is the intrinsic value of equity?

b. Immediately prior to the repurchase, what is the intrinsic stock price?

c. How many shares will be repurchased? How many shares will remain after the repurchase?

d. Immediately after the repurchase, what is the intrinsic value of equity? The intrinsic stock price?