QUESTION 3 - STOCK VALUATION ENTERPRISE VALUE (25 POINTS) Part a. Your company is expected to produce the following firm free cash flow over the next 3 years: Year 3 900 Year 1 500 Firm FCF Year 2 600 Thereafter (after year 3), the free cash flow is expected to grow at a rate of 3% per year in perpetuity. Assuming the weighted average cost of capital is 12% per year, what is your company's enterprise value today, year-07 [10 points] Enterprise Value is $ [Round to the nearest million] Part b. Enterprise value of your company is estimated to be $500 million. Upon inspection of financial records, you discover a current cash balance of S25 million total debt of $175 million, and 10 million shares outstanding. Given this information, what is your estimate of your company's stock price per share? [7 points) The share price is [Round to the nearest cent) Parte. You are trying to value a share of ABC Corp stock. In your analysis of similar companies, you have uncovered the following information: [8 points) Company A S1.70 Company B $2.50 Company $3.40 Eamnings per share Stock price per share $17.00 $25.00 $34.00 What is the average Pe multiple of Company A. Company B and Company C? [4 points) P/E of Company A is P/E of Company Bis P/E of Company C is The average P/E multiple of Company A. Company B and Company C is ii. ABC Corp has Earnings per share of $3.00. What is your estimate of ABC Corp's stock price per share based on the average P/E multiple of these three companies? [4 points) The share price is Round to the nearest cent) 8