Stocks	Beta	Portfolio weight	Expected return
Goodman Industries	0.70	30%	9.20%
Renfro Inc.	0.79	20%	9.74%
Heath Inc.	1.10	30%	11.60%
Lincoln Inc.	1.44	20%	13.64%

1. The most recent free cash flow (FCF) for Heath Inc. was $200 million, and the management expects the free cash flow to begin growing immediately at a 7% constant rate. The cost of capital is 12%.

Heath Inc. balance sheet shows that it has $10 million short-term investments, $15 million in notes payable, $60 million in long-term bonds, and $15 million in preferred stock. Heath has 60 million of shares outstanding. Calculate the following:

1a. Using the constant growth model, determine the value of operations for Heath Inc.

1b. total intrinsic value for Heath Inc.

1c. intrinsic value of equity for Heath Inc.

-intrinsic stock price per share for Heath Inc.