What is the intrinsic equity value of the firm today

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1. A firm is planning on having its first FCFF of $2 at year 3 (before year 3 FCFF would be 0). Then FCFF is expected to grow at 6% per year indefinitely. The firm has not debt and its stock's required return is 14%. What is the intrinsic equity value of the firm today?

A. $25.00

B. $16.87

C. $19.24

D. $20.99

2. Home Depot recently completed a 5-for-1 stock split. Prior to the split, its stock sold for $130 per share. If the firm's total market value increased by 5% as a result of increased liquidity and favorable signaling effects, what was the stock price following the split?

$27.30

$25.20

$29.50

$26.00

Reference no: EM131561074

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