eBook 1 Problem Walk-Through Problem 7-18 Free Cash Flow Valuation Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (Cs) during the next 3 years after which FCF is expected to grow at a constant 8% rate. Dozier's weighted average cost of capital is WACC -14%. 1 $20 2 $30 Free cash flow ($ millions) 3 $40 a. What is Dozier's horizon value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.) Round your answer to two decimal places. million b. What is the current value of operations for Dozier? Do not round intermediate calculations. Round your answer to two decimal places. million c. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent. ebook Problem 7-15 Return on Common Stock You buy a share of The Ludwig Corporation stock for $18.10. You expect it to pay dividends of $1.10, $1.1 price of $31.10 at the end of 3 years. and $1.2445 in Years 1, 2, and 3, respectively, and you expect to sell it at a a. Calculate the growth rate in dividends. Round your answer to two decimal places. b. Calculate the expected dividend yield. Round your answer to two decimal places c. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock's expected total rate of return (assume market is in equilibrium with the required rate of return equal to the expected return)? Do not round intermediate calculations. Round your answer to two decimal places