Brandtly Industries invests a large sum of money in R&D; as
a result, it retains and reinvests all of its earnings. In other
words, Brandtly does not pay any dividends, and it has no plans to
pay dividends in the near future. A major pension fund is
interested in purchasing Brandtly's stock. The pension fund manager
has estimated Brandtly's free cash flows for the next 4 years as
follows: $4 million, $7 million, $10 million, and $16 million.
After the fourth year, free cash flow is projected to grow at a
constant 3%. Brandtly's WACC is 11%, the market value of its debt
and preferred stock totals $42 million, the firm has $16 million in
nonoperating assets, and it has 25 million shares of common stock
outstanding.
 What is the present value of the free cash flows projected
during the next 4 years? Do not round intermediate calculations.
Round your answer to the nearest dollar. Write out your answers
completely. For example, 13 million should be entered as
13,000,000.
$
 What is the firm's horizon, or continuing, value? Round your
answer to the nearest dollar. Write out your answers completely.
For example, 13 million should be entered as 13,000,000.
$
 What is the market value of the company's operations? Do not
round intermediate calculations. Round your answer to the nearest
dollar. Write out your answers completely. For example, 13 million
should be entered as 13,000,000.
$
What is the firm's total market value today? Do not round
intermediate calculations. Round your answer to the nearest dollar.
Write out your answers completely. For example, 13 million should
be entered as 13,000,000.
$
 What is an estimate of Brandtly's price per share? Do not round
intermediate calculations. Round your answer to the nearest
cent.
