What is the firms value of operations

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XYZ Corp's most recet FCF was $48 million, the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 12% and it has 15 million shares of common stock outstanding.

The firm has $30 million in short term investments, which it plans to liquidate and distribute to common shareholders via a stock repurchase; the firm has no other non operating assets. It has $368 million in debt and $60 million in preferred stock.

a. What is the firm's value of operations?

b. Immediately prior to the repurchase, what is the intrinsic value of equity?

c. Immediately prior to the repurchase, what is the intrinsic stock price?

d. How many shares will remain after the repurchase? How many shares will be repurchased?

e. Immediately after the repurchase, what is the intrinsic value of equity and stock price?

Reference no: EM132062541

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