1) You expect CCM Corporation to generate the following free cash flows over the next five years:

Year 1 (FCF $ millions 25); Year 2 (FCF $ millions 28); Year 3 ( FCF $ millions 32); Year 4 (FCF $ millions 37); Year 5 ( FCF $ millions 40).

Following year five, you estimate that CCM's free cash flows will grow at 5% per year and that CCM's weighted average cost of capital is 13%. (Excel)

2) If CCM has $200 million of debt and 8 million shares of stock outstanding, then the share price for CCM is closet to:

A)$49.50

B)$12.50

C)$19.35

D)$24.50

3) If CCM has $150 million of debt and 12 million shares of stock outstanding, then the share price for CCM is closet to:

A)$49.50

B)$11.25

C)$20.50

D)$22.75

4) You expect CCM Corporation to generate the following free cash flows over the next five years:

Year 1 (FCF $ millions 75); Year 2 (FCF $ millions 84); Year 3 ( FCF $ millions 96); Year 4 (FCF $ millions 111); Year 5 ( FCF $ millions 120).

Beginning with year six, you estimate that DM's free cash flows will grow at 6% per year and that DM's weighted average cost of capital is 15%.

Calculate the enterprise value for DM Corporation.

5) If DM has $500 million of debt and 14 million shares of stock outstanding, then what is the price per share for DM Corporation?