02. (20 marks) Quantum Computing has the following income statement for the past three years: Quantum Income Statement $ million 2020 2019 2018 Revenues 3500 2750 2240 Labour Depreciation Interest expense General expenses 1200 350 200 1075 1101 275 200 250 1000 225 200 800 2225 2825 2525 Pre tax net income 675 225 15 Taxes 168.75 56.25 3.75 Net Income 506.25 168.75 11.25 Assume revenues will grow by 8% every year for the next 10 years and expenses will grow by 7% during the same time period. The 25-year Government of Canada bond yields 1.75% Quantum has issued $1,000 par value bonds that pay 5%, bond equivalent yield. Current market yields are 4%. The bonds have 22 years left to maturity. Interest is paid semiannually. The beta for Quantum is 2.3 and market yields for equities are 7%. Assume the mix of bonds to equity is 50%/50% for Quantum (equal). Quantum pays tax at 25% After 10 years the free cash flow for Quantum will grow at 2% per year in perpetuity. Calculate the value of Quantum. I recommend that you use a spreadsheet for this