3. Rotken Enterprises' 2019 and 2020 balance sheets are shown below: 2020 2019 Cash $99,000 $87,000 Accounts Receivable 102,500 84,000 Inventories 36,000 33,600 Total Current Assets $237,500 $204,600 Net Fixed Assets 68,200 43,200 Total Assets $305,700 $247,800 Accounts Payable $30,600 $22.400 Accruals 29,800 22,300 Notes Payable 16,000 15,100 Total current liabilities $76.400 $59,800 Long-term debt 75,100 62,900 Total Liabilities $151,500 $122,700 Common Stock 100,000 100,000 54.200 25,100 Retained Earnings Total Common Equity $154,200 $125,100 Total Liabilities and Equity $305,700 $247.800 Sales for 2020 were $515,700 and EBITDA was 40% of sales. Furthermore, depreciation and amortization were 10% of net fixed assets, interest was $5,257, the corporate tax rate was 25% and DMH pays 40% of its net income as dividends. a. Calculate free cash flow for 2020. b. Use the corporate valuation model to find the value of the firm's stock given the following assumptions: Free cash flow is expected to grow at a rate of 25% over the next 2 years, at 15% for the following 2 years and then it will level off to 8%. The market value of debt is $100,000 and the firm has 1.5 million shares of common stock outstanding. DMH Enterprises weighted average cost of capital is 10%. 3. Rotken Enterprises' 2019 and 2020 balance sheets are shown below: 2020 2019 Cash $99,000 $87,000 Accounts Receivable 102,500 84,000 Inventories 36,000 33,600 Total Current Assets $237,500 $204,600 Net Fixed Assets 68,200 43,200 Total Assets $305,700 $247,800 Accounts Payable $30,600 $22.400 Accruals 29,800 22,300 Notes Payable 16,000 15,100 Total current liabilities $76.400 $59,800 Long-term debt 75,100 62,900 Total Liabilities $151,500 $122,700 Common Stock 100,000 100,000 54.200 25,100 Retained Earnings Total Common Equity $154,200 $125,100 Total Liabilities and Equity $305,700 $247.800 Sales for 2020 were $515,700 and EBITDA was 40% of sales. Furthermore, depreciation and amortization were 10% of net fixed assets, interest was $5,257, the corporate tax rate was 25% and DMH pays 40% of its net income as dividends. a. Calculate free cash flow for 2020. b. Use the corporate valuation model to find the value of the firm's stock given the following assumptions: Free cash flow is expected to grow at a rate of 25% over the next 2 years, at 15% for the following 2 years and then it will level off to 8%. The market value of debt is $100,000 and the firm has 1.5 million shares of common stock outstanding. DMH Enterprises weighted average cost of capital is 10%