The problem asks us to find the value of Patrick's stock, given the company's free cash flow, required return, market value of debt, market value of preferred stock, and the number of shares outstanding.

1. Problem Description

The problem asks us to find the value of Patrick's stock, given the company's free cash flow, required return, market value of debt, market value of preferred stock, and the number of shares outstanding.

2. Solution Steps

First, we need to calculate the total value of the firm. Since the free cash flow is expected to be constant forever, we can use the perpetuity formula to find the enterprise value.

$Enterprise Value = \frac{Free Cash Flow}{Required Return}$

Enterprise Value = \frac{120,000}{0.12} = $1,000,000$

Next, we need to calculate the value of equity by subtracting the market value of debt and the market value of preferred stock from the enterprise value.

$Equity Value = Enterprise Value - Market Value of Debt - Market Value of Preferred Stock$

$Equity Value =$1,000,000 - $300,000 -$70,000 = $630,000$

Finally, we need to calculate the value per share by dividing the equity value by the number of shares outstanding.

$Value Per Share = \frac{Equity Value}{Number of Shares Outstanding}$

Value Per Share = \frac{630,000}{100,000} = $6.30$

3. Final Answer

The value of Patrick's stock is $6.

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