Start with the partial model in the file Ch$08$ P$25$ Build a Model.xIsx. Selected data for the Derby Corporation are shown here. Use the data to answer the questions.

Download spreadsheet Ch$08$ P$25$ Build a Model$-$f$6$a$7$ab$.$xlsx

s

c$.$ Calculate the estimated Year$-0$ price per share of common equity. Round your answer to the nearest cent.

$ $,8$Free Cash Flow Valuation Model

a$.$ Calculating the estimated horizon value $($i$.$e$.,$ the value of operations at the end of the forecast

period immediately after the Year$-4$ free cash flow$)$

Formulas

Constant long$-$term growth rate

Horizon value at Year $4$

b$.$ Calculating the present value of the horizon value, the present value of the free cash flows,

and the estimated Year$-0$ value of operations

Present value of HV

Present value of FCF

Value of operations

million

million

million

c$.$ Calculating the estimated Year$-0$ price per share of common equity

Value of operations

Value of marketable securities

Total intrinsic value

Value of total debt

Value of preferred stock

Intrinsic value of equity

$$ Number of shares

million #N$/$A

Intrinsic stock price