The Henley Corporation is a privately held company specializing in lawn care products and services. It was a WACC of 12.5%. Further, the most recent financial statements are shown below.

Income Statement for the year ending December 31 (Millions of Dollars Except for Per Share Data)

	2007
Net sales	$800.00
Operating Costs (except depreciation)	576
Depreciation	60
Earnings before interest and taxes (EBIT)	$164.00
Less interest	32
Earnings before taxes	$132.00
Taxes (40%)	52.8
Net income available for common stockholders	$79.20
Number of shares (in millions)	10

Balance Sheet for December 31 (Millions of Dollars)

	2007		2007
Assets		Liabilities and Equity
Cash	$8.00	Accounts payable	$16.00
Marketable securities	20	Notes payable	40
Accounts receivable	80	Accruals	40
Inventories	160	Total current liabilities	$96.00
Total current assets	268	Long-term bonds	315
Net Property, Plant and equipment	600

The ratios and selected information for the current and projected years are shown below (sales growth beyond 2011 = 6% per year; all the ratios beyond 2011 are the same as in 2011).

Actual		Projected
	2007	2008	2009	2010
Sales growth rate		15%	6%	6%
Operating Costs/Sales	72%	72	72	72
Depreciation/Net PPE	10	10	10	10
Cash/Sales	1	1	1	1
Accounts Receivable/Sales	10	10	10	10
Inventories/Sales	20	20	20	20
Net PPE/Sales	75	75	75	75
Accounts payable/Sales	2	2	2	2
Accruals/Sales	5	5	5	5
Tax rate	40	40	40	40

(a)

Calculate free cash flow (in millions of dollars) for each projected year till 2010. (Round your answer to two decimal places.)

2008$ million

2009$ million

2010$ million

What are the FCFs after 2010?

FCFs will grow at the same rate as sales, at %.

(b)

Calculate the enterprise value (in millions of dollars) at the end of fiscal year 2007 (i.e., 12/31/2007). (Round your answer to two decimal places.)

$

(c)

Calculate the stock price (in dollars) at the end of fiscal year 2007 (i.e., 12/31/2007). (Round your answer to two decimal places.)

$