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Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at...

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Finance

Deployment Specialists pays a current (annual) dividend of $1 and is expected to grow at 25% for two years and then at 5% thereafter. If the required return for Deployment Specialists is 11.0%, what is the intrinsic value of its stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

The MoMi Corporations cash flow from operations before interest and taxes was $1.5 million in the year just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to invest an amount equal to 15% of pretax cash flow each year. The tax rate is 21%. Depreciation was $210,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The appropriate market capitalization rate for the unleveraged cash flow is 12% per year, and the firm currently has debt of $3 million outstanding. Use the free cash flow approach to calculate the value of the firm and the firms equity. (Enter your answer in dollars not in millions.)

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