## 1. Suppose Leonard Nixon & Shull Corporation s projected free cash flow for next

1. Suppose Leonard Nixon & Shull Corporation s projected free cash flow for next year is \$100000 and FCF is expected to grow at a constant rate of 6%. If the company s weighted average cost of capital is 11% what is the value of its operations?a. \$1714750b. \$1805000c. \$1900000d. \$2000000e. \$21000002. Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2 what is the Year 0 value of operations in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments).Year: 1 2Free cash flow: -\$50 \$100a. \$1456b. \$1529c. \$1606d. \$1686e. \$17703. Based on the corporate valuation model the value of a company s operations is \$1200 million. The company s balance sheet shows \$80 million in accounts receivable \$60 million in inventory and \$100 million in short-term investments that are unrelated to operations. The balance sheet also shows \$90 million in accounts payable \$120 million in notes payable \$300 million in long-term debt \$50 million in preferred stock \$180 million in retained earnings and \$800 million in total common equity. If the company has 30 million shares of stock outstanding what is the best estimate of the stock s price per share?a. \$24.90b. \$27.67c. \$30.43d. \$33.48e. \$36.824. Based on the corporate valuation model the value of a company s operations is \$900 million. Its balance sheet shows \$70 million in accounts receivable \$50 million in inventory \$30 million in short-term investments that are unrelated to operations \$20 million in accounts payable \$110 million in notes payable \$90 million in long-term debt \$20 million in preferred stock \$140 million in retained earnings and \$280 million in total common equity. If the company has 25 million shares of stock outstanding what is the best estimate of the stock s price per share?a. \$23.00b. \$25.56c. \$28.40d. \$31.24e. \$34.365. Vasudevan Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 13% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3 what is the Year 0 value of operations in millions?Year: 1 2 3Free cash flow: -\$20 \$42 \$45a. \$586b. \$617c. \$648d. \$680e. \$714