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You are going to use free cash flow model to estimate Weeky Corporation's intrinsic value. The firm's WACC is 12%. The company will have the

You are going to use free cash flow model to estimate Weeky Corporation's intrinsic value. The firm's WACC is 12%. The company will have the free cash flows (in millions) shown below. After Year 3, the FCFs are expected to grow at a constant rate of 5.00% a year in the future. The company has $160 million of long-term debt and preferred stock, and it has 40 million shares of common stock outstanding. What is the firm's estimated intrinsic value per share of common stock?

Year

1

2

3

Free cash flow

$10.00

$35.00

$50.00

a. The time that the company's cash flow settle down to long term growth rate (horizon time) is year what?

b. The Company's Free cash flow at year 4 is ( ) million

c. The Firm Value at year 3 (Horizon Value) is ( ) million.

d. The Firm Value at time 0 is (. ) millions.

e. Then the firm's estimated instrinsic value per share of common stock at time 0 is $(. )

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