Yandie Izzo manages a dividend growth strategy for a large asset management firm. Izzo meets with her investment team to discuss potential investments in three companies: Company A, Company B, and Company C. Statements of cash flow for the three companies are presented in Exhibit 1.

1a. Based on Exhibits 1 and 2 and the proposed two-stage FCFE model, the intrinsic value of Company Bs equity is closest to: A. $70,602 million. B. $73,588 million. C. $79,596 million.

1b. Based on Exhibits 1 and 2 and the proposed single-stage FCFF model, the intrinsic value of Company Cs equity is closest to: A. $277,907 million.

B. $295,876 million.

C. $306,595 million.

Please show how you got to your answer in excel or calculation format? Thank you!

Exhibit 1 Statements Izzo's team first discusses key cnaracterstcs or Lompany A. I ne company nas a nistory or paying modest dividenas relative to FCFE, has a stable capital structure, and is owned by a controlling investor. The team also considers the impact of Company A's three non-cash transactions in the most recent year on its FCFE, including the following: Transaction 1: A $900 million loss on a sale of equipment Transaction 2: An impairment of intangibles of $400 million Transaction 3: A $300 million reversal of a previously recorded restructuring charge In addition, Company A's annual report indicates that the firm expects to incur additional non-cash charges related to restructuring over the next few years. To value the three companies' shares, one team member suggests valuing the companies' shares using net income as a proxy for FCFE. Another team member proposes forecasting FCFE using a sales-based methodology based on the following equation: FCFE=NI(1DR)(FCInvDep)(1DR)(WCInv) Izzo's team ultimately decides to use actual free cash flow to value the three companies' shares. Selected data and assumptions are provided in Exhibit 2