5. Abbey Naylor, CFA, has been asked to value HBS Corporation by using FCFE model. Naylor believes that HBS's FCFE will grow at 27% for two years and at 7% thereafter. The current FCFE for HBS is $300 million. The beta for the company is 1.25. The risk-free return is 3.5% and market risk premium is 5%. (14 points) a) What model (constant, two-stage, or three-stage model) is appropriate to use to value HBS using FCFE model? b) What is the required rate of return for HBS Corporation? c) How much is the terminal value of HBS at end of year 2? d) What is the estimated value of the firm's equity? e) Given 200 million shares outstanding for HBS, what is the value per share