Given the information below about a fictional company, answer the questions that follow. ,,Most recent FCF $5,000,000 ,Expected growth rate of FCF 11% (constant),WACC 8% ,Value of nonoperating assets $1,500,000 ,Value of debt $9,000,000 ,Preferred stock $7,000,000 ,Shares outstanding 800,000 ,, A If the company feels that its investments in nonoperating assets has a rate of return of 7%, what action would you recommend for the company? Why?, B What would be the company’s intrinsic stock price?, C What is the intrinsic value of the company’s equity?, D If the company sells its nonoperating assets at their current value, and repurchases its stock, how many shares will it purchase?, E If the company sells its nonoperating assets at their current value, and repurchases its stock, what is the new intrinsic value of the company’s equity?, ,
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