1.(DCF) A company is forecast to have FCFF next year equal to 1000. Currently, this company has a book value of debt equal to 10000 and a book value of equity equal to 70000. The after-tax cost of debt is equal to 4% while the company's equity has 8 = 1. The current value of the long-run risk-free rate is 4% while the stock market risk premium is expected to be 6%. (a) If the return on capital (ROC) is expected to be equal to 10% and the capital rein- vestment rate is forecast to be equal to 80%, find the present intrinsic value of the assets of this firm according to the FCFF discounted cash flow valuation model. (b) What happens to today's intrinsic value of the assets of this firm if the capital rein- vestment rate forecast changes to 90%? (c) How would you answers to (a) and (b) above change if the forecasted value of ROC is revised to 9%? 1.(DCF) A company is forecast to have FCFF next year equal to 1000. Currently, this company has a book value of debt equal to 10000 and a book value of equity equal to 70000. The after-tax cost of debt is equal to 4% while the company's equity has 8 = 1. The current value of the long-run risk-free rate is 4% while the stock market risk premium is expected to be 6%. (a) If the return on capital (ROC) is expected to be equal to 10% and the capital rein- vestment rate is forecast to be equal to 80%, find the present intrinsic value of the assets of this firm according to the FCFF discounted cash flow valuation model. (b) What happens to today's intrinsic value of the assets of this firm if the capital rein- vestment rate forecast changes to 90%? (c) How would you answers to (a) and (b) above change if the forecasted value of ROC is revised to 9%