Question 3. (10 points) A company estimates the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 6% rate. The company's cost of capital is 12%. the company has $3 million in marketable securities, $50 million in debt, and 10 million shares of stock.
a. Calculate the company's horizon, value?
b. Calculate the company's current value of operations.
c. Calculate the value of one share of share?
d. The stock is selling for $32.50. Is it appropriately priced in the market? Explain
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