Exhibit 14 -Based on the Information Provided,calculate the Intrinsic Value in 2010

question 48

Multiple Choice

Exhibit 14.5
Use the Information Below for the Following Problem(S)
$$\begin{array} { l c c } & \text { Wal-Elue } & \text { Industry } \\ \text { DPS } & 1.00 & 1.50 \\\text { Total As5et Tunover } & 3.20 & 2.50 \\\text { Net Profit Marpin } & 3.50 \% & 3.00 \% \\\text { EpS } & 4.00 & 3.00 \\\text { Total As5ets/Equity } & 3.00 & 4.00\end{array}$$
-Based on the information provided,calculate the intrinsic value in 2010 of a share of INV Corp.using the FCFF (free cash flow to the firm) model.For 2010 the FCFF was $30,000,total debt was $20,000,and there were 12000 shares outstanding.The required rate of return is 9% and the estimated growth rate in FCFF is 6.5%.

• A) $104.83
• B) $153.25
• C) $112.50
• D) $94.92
• E) $80.45

---

Definitions:

Consumer Good

A commodity or a product that is produced and purchased to satisfy the personal needs or wants of the consumer.

General Creditor

An individual or entity that is owed a debt that is not secured by collateral, leaving them with no special rights to any specific property of the debtor in case of default.

Preferred Claim

A type of claim that is given priority, especially in bankruptcy proceedings, ensuring that it is paid out before other types of claims.

Article 9

A provision of the Uniform Commercial Code that governs secured transactions involving personal property, establishing a legal framework for creating and enforcing security interests.