The Miracle Clean Company has some new products that it expects to lead to high growth in the near future. It has given analysts the following forecasts for the next three years:

2012 2013 2014

Depreciation.................................. 15,000................. 21,000............... 27,000

EBIT......................................... 125,000................ 145,000............. 165,000

Investment in Operating Assets........... 35,000.................. 25,000.............. 10,000

The firm's debt has a current market value of $250,000 and it has $64,000 in marketable securities. There are 100,000 common shares outstanding. The expected tax rate is 35%, and the WACC is estimated to be 12%.

a. Calculate the free cash flow for each of the next three years.

b. After 2014 free cash flow growth is expected to slow to 8% per year permanently. What is the value of the stock today?

c. Without the new products, free cash flow in 2012 would be $55,000 and it would grow at 8% per year forever. What is the value of the stock if the new products aren't introduced?