$1.$ LockBenz Corporation, one of the largest defense contractors in the world, reported EBITDA of $$1,290$ million in $2023,$ prior to interest expenses of $$215$ million and depreciation charges of $$400$ million. Capital expenditures in $2023,$ amounted to $$450$ million, and working capital was $7\%$ of revenues. Revenues in $2023$ were $$13,500$ million. Please note that the company$$s fiscal year ends on October $31,2023.$

The firm expects revenues, earnings, capital expenditures and depreciation to grow at $8\%$ a year from $2023$ to $2028,$ after which time the growth rate is expected to drop to $3\%.$ Capital spending is expected to offset depreciation in the stable state period.

The debt outstanding was $$3\mathrm{.}5$ billion $($in book value terms$)$ but was trading at a market value of $$3$ billion. The company$$s debt is rated AA$.$ Similar AA bonds have a yield to maturity of $8\%.$ The company$$s stock has a beta of $1\mathrm{.}2,$ the market risk premium is $5\%$ and treasury bonds have a yield of $6\%.$ The company$$s effective marginal tax rate was $40\%.$ Assume the company$$s optimal debt ratio is $40\%.$

a$.$ What discount rate should be used to value the company$$s cash$-$flows? WACC

b$.$ Estimate the Free cash flow to the firm $($FCFF$)$ for $2024$ to $2028(5$ years$).$

c$.$ Estimate the horizon value in $2028.$

d$.$ Estimate the total value of the firm at the beginning of $2024$ fiscal year $($November $2023).$

e$.$ Estimate $($at the beginning of $2024$ fiscal year$)$ the value of the equity in the firm and the value per

share. Assume the company does not have any significant short$-$term investments.