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You are trying to value JUNK., an streaming service of TV shows and movies. Junk sales are expected to be $ 1 1 0 million

You are trying to value JUNK., an streaming service of TV shows and movies. Junk sales are expected to be $110 million one year from now (year 1) and $130 million two years from now (in year 2). In all future years (i.e., year 1 through infinity), its costs of goods sold together with SG&A will be 65% of sales, R&D will be 9% of sales, and its net working capital will be 6% sales. In all future years, JUNK will not have any capital expenditure or depreciation.Currently (year 0), the market value of debt for JUNK is $28 million, its net working capital is $2.1 million, and it has $1.9 million shares outstanding. Junk does not have any excess cash on its balance sheet. The firm faces a 35% tax rate and its weighted average cost of capital is 14%. Please show all calculations and work: What is the estimate of the JUNK net working capital in year 1 and year 2? What are the free cash flows to JUNK in year 1 and year 2? Suppose that firms free cash flows after year 2 will grow by 5.5% indefinitely, what is the enterprise value of JUNK as of now based on the discounted free cash flow (DFCF) model? What is the current stock price of JUNK?

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