1.You are evaluating a firm's shares which are currently sold for $22 for investment. You are using 10% of margin of safety that is applied to the value per share. Use the following information. Last year the firm posted sales of $500 million. You expect sales to grow at 10 percent for 3 years and 8 percent for another two years before firm matures with a sales growth rate of about 4%. Assume that the company currently has 25% operating margin which will increase to 27% in year 3 and after. Corporate tax rate and will remain at the current rate of 25%. Interest is paid at after tax cost of debt rate of 5%. The company has $250 million debt which is a quarter of assets. Use CAPM to calculate the company's cost of equity (Risk free rate is 2%, market risk premium is 8% and company's equity beta is 1.20). Capital expenditures will be 10% of sales and depreciation will be 1% of sales every year. Company also invests 0.5% of sales in expanding net working capital every year. The number of shares outstanding is 30 million. Would you invest in this stock? Solve the problem in Excel and copy-paste your tables to your word document - make sure they are organized, properly labeled and readable. (25 points)