Your employer, a mid-sized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporary heavy workloads. Your employer is also considering the purchase of Bigger-staff & McDonald (B & M), a privately held company owned by two friends, each with 5 million shares of stock. B & M currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. B & M's financial statements report short-term investments of $100 million, debt of $200 million, and preferred stock of $50 million. B & M's weighted average cost of capital (WACC) is 11%. Answer the following questions. Assume growth rates are at their original levels. What happens to the ROIC and current value of operations if the operating profitability ratio increases to 5.5%? Now assume growth rates and operating profitability ratios are at their original levels. What happens to the ROIC and current value of operations if the capital requirement ratio decreases to 51%? Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements? What is the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements? What insight does the free cash flow valuation model provide regarding possible reasons for market volatility? Write out a formula that can be used to value any dividend-paying stock, regardless of its dividend pattern. What is a constant growth stock? How are constant growth stocks valued? What happens if a company has a constant g_L that exceeds its r_s? Will many stocks have expected growth greater than the required rate of return in the short run (i.e., for the next few years)? In the long run (i.e., forever)