Demo Inc. is expected to generate a free cash flow (FCF) of $6,155.00 million this year (FCF, = $6,155.00 million), and the FCF is expected to grow ata rate of 25.00% over the following two years (FCF, and FCF,). After the third year, however, the FCF is expected to grow at a constant rate of 3.90%per year, which will last forever (FCF.). Assume the firm has no nonoperating assets. If Demo Inc.'s weighted average cost of capital (WACC) is11.70%, what is the current total firm value of Demo Inc.? (Note: Round all intermediate calculations to two decimal places.)O $110,497.24 millionO $18,577.33 millionO $146,683.23 millionO $132,596.69 millionDemo Inc.'s debt has a market value of $82,873 million, and Demo Inc. has no preferred stock. If Demo Inc. has 750 million shares of common stockoutstanding, what is Demo Inc.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimalplaces.)O $36.83O $35.83O $110.50O $40.52

1. a. the current total firm value of Demo Inc. is $110,497.24 million. 2. c. the estimated…

Answered: Demo Inc. is expected to generate a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 20EA: Towson Industries is considering an investment of $256,950 that is expected to generate returns of...

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