In firm valuation, the assumptions about leverage have to be made to compute the cost of capital.
You can still normalize earnings and use an average growth rate across the economic cycle.
There are more significant barriers to entry (the patent, for instance) for Biogen.
12.4: All of the above
Historical growth does look at the past, analyst estimates are sometimes biased and fundamental growth rates often just reflect current year inputs.
The terminal value will be heavily influenced by assumptions about growth during the high growth period.
The terminal value will reflect the expected dividend payout when the firm reaches stable growth.
12.7: The FCFE value will usually be higher than the DDM value
Most firms pay out less in dividends than they have available in FCFE.
You can allow leverage to change over time in a firm valuation.
12.9: Undervalue the firm
You have taken away the benefits of growth but left the company saddled with all of the costs of high growth (high reinvestment, high risk)
12.10: Higher than $60,219 million
Without net cap ex, the free cashflow to the firm will be much higher and so will the terminal value.
12.11: All of the above
A firm's PE is affected by all of these factors.
12.12: The higher of the two values, since it is my job to get the highest
price I can for my client
Of course, the investors I place these IPOs with are also my customers, creating a conflict of interest.