Calculate the total firms value and value of common equity

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Derham Inc. has an expected net operating profit after taxes, EBIT (1-t) of $2,800 million in the coming year. In addition, the firm is expected to have capital expenditures of $420 million, and net operating working capital is expected to increase by $50 million. how much free cash flow (FCF) is Dernham inc. expected to generate over the next year? The answer for this is $2,330 million, and will be used in the next question

A.) Dernham Inc's FCFs are expected to grow at a constant rate of 3.54% per year in the future. The market value of Dernham Inc.'s outstanding debt is $14,809 million and prefered stocks value of $8,227 million, Dernham Inc. has 750 million shares of common stock outstanding, and its weighted average cotst of capital (WACC) equals 10.62% Using the preceding information and the FCF you calculated in the prevoious question calculate the 1. Total firms value 2. value of common equity 3. intrinsic value per share

Reference no: EM131581146

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