What is the intrinsic value of equity

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Bayani Bakery's most recent FCF was $45 million; the FCF is expected to grow at a constant rate of 6%. The firm's WACC is 13%, 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 nonoperating assets. It has $364 million in debt and $61 million in preferred stock.

Problem 1: What is the value of operations? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.

Problem 2: Immediately prior to the repurchase, what is the intrinsic value of equity?

Reference no: EM132763757

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