3. Victor Hugo, CEO and the owner of the Les Miserables, would like to acquire a company with the following information. The company can borrow long term at 16% and the tax rate is 40%. Market value of debt is $160000000 and the market value of equity is $260000000. The 10-year T-bond rate is 6% and the historical risk premium is 4%. Beta of the company is estimated as 1.6 and the the growth rate of the company is 6%. The company has 6 million shares. FCFFs for the next three years are given below. (Equity market is not in equilibrium.)

year	FCF to firm
1	12 million dollars
2	14 million dollars
3	16 million dollars

a. Calculate the WACC. (15 pts) b. Calculate the firm value of the company. (15 pts)

c. Calculate the PPS of the company. (5 pts)