Question

Blur Corp.'s FCFs are expected to grow at a constant rate of 4.62% per year in the future. The market value of Blur Corp.'s outstanding debt is $31,412 million, and its preferred stocks' value is $17,451 million. Blur Corp. Has 150 million shares of common stock outstanding, and its weighted average cost of capital (WACC) equals 13.86%.

Answer 1

Answer: total firm value = $69,805.19

Intrinsic Value of Common equity = $20,942.19

Intrinsic Value Per share = $139.61

Explanation:

Answer 2

some information is missing, so I looked for similar questions and found the attached image:

free cash flow = net income + non-cash expenses - capital expenditures - increase in net working capital

free cash flow for current year = $7,600 - $1,140 - $10 = $6,450 million

the firm's total value = ($6,450 x 1.0462) / (13.86% - 4.62%) = $6,747.99 / 9.2% = $74,977.67 million

the value of common stocks = firm's total value - value of outstanding debt - preferred stocks = $74,977.67 - $31,412 - $17,451 = $26,114.67 million

intrinsic value per share = $26,114.67 / 150 = $174.10 per stock