two assets funding the plan? Please fully explain your work. (7 points) ding perpetuities, respectively, if these are the only 22. The financial statements of Flathead Lake Manufacturing for the year just ended on December 31, 2012 appear below. The firm has 200,000 shares outstanding. The cost of equity capital is 10%. The cost of debt capital is 7%. Current market value of debt and equity imply a capital structure of 60% debt and 40% equity. The firm is expected to grow at a constant rate of 3%. What is the intrinsic value per share of Flathead? Please fully explain your work to receive credits. (13 points) te: Prim ctively. PART 2: WRITTEN-ANSWER QUESTIONS Note: please provide your answer to each question in the space provided. If you need more space, you can use the blank page provided at the end of this question booklet. 21. A pension plan is obligated to make disbursements of $1 million, $2 million, and $1 million at the end of each of the next three years, respectively. The annual interest rate is 10%. If the plan wants to fully fund and immunize its position, how much of its portfolio should it allocate to one-year zero-coupon bonds and 10%-yielding perpetuities, respectively, if these are the only two assets funding the plan? Please fully explain your work. (7 points) 168 two assets funding the plan? Please fully explain your work. (7 points) ding perpetuities, respectively, if these are the only 22. The financial statements of Flathead Lake Manufacturing for the year just ended on December 31, 2012 appear below. The firm has 200,000 shares outstanding. The cost of equity capital is 10%. The cost of debt capital is 7%. Current market value of debt and equity imply a capital structure of 60% debt and 40% equity. The firm is expected to grow at a constant rate of 3%. What is the intrinsic value per share of Flathead? Please fully explain your work to receive credits. (13 points) te: Prim ctively. PART 2: WRITTEN-ANSWER QUESTIONS Note: please provide your answer to each question in the space provided. If you need more space, you can use the blank page provided at the end of this question booklet. 21. A pension plan is obligated to make disbursements of $1 million, $2 million, and $1 million at the end of each of the next three years, respectively. The annual interest rate is 10%. If the plan wants to fully fund and immunize its position, how much of its portfolio should it allocate to one-year zero-coupon bonds and 10%-yielding perpetuities, respectively, if these are the only two assets funding the plan? Please fully explain your work. (7 points) 168