Topic 5 Free Cash Flow Valuation In-Class Example Consider the following information for the fictional firm KXS Designs, Inc. Assume that the firm is in a mature industry and has a constant growth rate. i. Determine the FCFF and the intrinsic value of the firm. ii. Determine the enterprise value of the firm. iii. Determine the FCFE and the intrinsic price per share. - The firm has bonds outstanding with a YTM of 7.85% and a market value of $15.38mln. - KXS's stock is currently priced at $8.63 and there are 3.18mln shares outstanding. - The correlation of returns of KXS's stock and those of the S\&P/TSX Composite Index is 0.62 . - The annualized volatility of the returns on KXS's stock over the past 10 years is 24.3% while that of the S\&P/TSX Composite Index is 13.1%. - The current Government of Canada 10-Year Benchmark Bond Yield is 1.96% and the expected return on the S\&P/TSX Composite Index is 8.70%