Attempts Keep the Highest/3 5. The multistage valuation model Consider the case of Merry Meerkat Marketing Inc.: Merry Meerkat Marketing Inc. is expected to generate a free cash flow (FCF) of $1,655,000 this year and the FCF is expected to grow at a rate of 20% over the following two years (FCF, and FCF.). After the third year however, the company's FCFs are expected to grow at a constant rate of 9% per year which will last forever (FCF...). If Merry Meerkat's weighted average cost of capital (WACC) is 18%, complete the following table and compute the current value of Merry Meerkat's operations. Round all dollar amounts to the nearest whole dollar, and assume that the firm does not have any nonoperating assets in its balance sheet and that all FCFs occur at the end of each year. PV(FCF) CF $1,655,000 Year FCF FCF FCF FCF Horizon Value Merry Meerits debt has a market value of $16.384.785 and Merry Mearkat has no preferred stack in capital structure of Mee Meerkata 450.000 shares of common stock outstanding then the total value of the company's common cuits and the imated its value per share of the common stock is per share rounded to the nearest Asume the following The of earderetter en kommands Proconutes such as more than of the companhance but to ge- FCF FCF FCF Horizon Value Merry Meerkat's debt has a market value of $16,384.785. and Merry Meerkat has no preferred stock in its capital structure. If Merry Meerkat has 450.000 shares of common stock outstanding, then the total value of the company's common equity is 5 and the estimated intrinsic value per share of its common stock is 5 per share (rounded to the nearest dollar). Assume the following: The end of Year 3 differentiates Merry Meerkat's short-term and long-term FCF. Professionally-conducted studies have shown that more than 80% of the average company's share price is attributable to long-term- rather than short-term-cash flows. Is the percentage of Merry Meerkat's expected long-term cash flows consistent with the value cited in the professional studies? No, because the percentage of Merry Meerkat's expected long-term cash flow actually 19.590. Yes, because 80.41% of the firm's share prices derved from expected long-term free cash flowe Ves, because 70.76% of the firm's share prices derived from t expected long-term free cash flow to because only 58 574 of the firm's share price is Carived from its expected long-term free can flow Grad Now Save & Conti Continue without