The financial statements of Lioi Steel Fabricators are shown below both the actual results for 2010

The financial statements of Lioi Steel Fabricators are shown below – both the actual results for 2010 and the projections for 2011. Free cash flow is expected to grow at a 6% rate after 2011. The weighted average cost of capital is 11%.

Income Statements for the Year Ending December 31(Millions of Dollars Except for Per Share Data)

Balance Sheets for December 31 (Millions of Dollars)

a. If operating capital as of 12/31/2010 is $502.2 million, what is the free cash flow for 12/31/2011?
b. What is the horizon value as of 12/31/2011?
c. What is the value of operations as of 12/31/2010?
d. What is the total value of the company as of 12/31/2010?
e. What is the intrinsic price per share for12/31/2010?

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Actual Projected 2010 2011 S 530.00 381.6 39.8 421.4 S 108.6 16.0 S 92.6 37.0 S 55.6 Net Sales Cost (except depreciation) Depreciation S 500.0 360.0 37.5 Total operating costs 397.5 S 102.5 13.9 $88.6 35.4 S 53.2 6.0 S 47.2 S 40.8 Earnings before interest and taxes Less interest Earnings before taxes Taxes 40% Net income before preferred dividends Preferred dividends Net income available for common dividends S 48.2 Common dividends S 29.7 Addition to retained earnings Number of shares Dividends per share S 6.4 10 $ 4.08 S 18.5 10 S 2.97 Actual Projected 2010 2011 Assets Cash Marketable securities Account receivables Inventories $ 5.3 49.9 53.0 106.0 214.2 375.0 S589.2 5 5.6 51.9 56.2 112.4 226.1 397.5 623.6 Total current assets Net plant and equiptment Total Assets iabilities and Equity Account payable Note payable Accruals S9.6 69.9 27.5 $ 107.0 140.8 35.0 160.0 146.4 S 306.4 S 589.2 $ 11.2 74.1 28.1 $ 113.4 148.2 37.1 160.0 164.9 S 324.9 S 623.6 Total currentliabilities Long-te m bonds Prefe rred stock Common stock (par plus PIC) Retained equity Common equity Total liabilities and equity