4. Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCF

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4. Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCF

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4. Dozier Corporation is a fast-growing supplier of office products. Analysts project the following
free cash flows (FCFS) during the next 3 years, after which FCF is expected to grow at a constant
7% rate. Dozier's weighted average cost of capital is WACC 13%.
Year 1 2 3
Free cash flow ($ millions) -20 30 40
i. What is Dozier's horizon value?
ii. What is the current value of operations for Dozier?
iii. Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the intrinsic price per share?
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