You have just learned that M&M has undertaken a major expansion that will change its expected free cash flows to $15 million in 1 year, $20 million in 2 years, and $36 million in 3 years. After 3 years, free cash flow will grow at a rate of 5%. No new debt or preferred stock was added. Hence, the investment was financed by equity from the owners. Assume the WACC is 11%, and there are still 10 million shares of stock outstanding.

What is the companys horizon value (i.e., its value of operations at Year 3)?

What is its current value of operations (i.e., at Time 0)?

What is its estimated intrinsic value of equity on a price-per-share basis?

(Please show work)