5. With restaurants and bars closing given social distancing guidelines, individuals have drastically shifted investment fund, and you are re-valuing the stock of Food 'n' Stuff, a fictional grocery store company. food and beverage consumption to grocery and liquor stores. You work as an analyst for an active With potential long-run societal changes in shopping behavior, you make an upward revision to Food billion. You believe revenue will grow a rate of 30% for the next 3 years (Year 2, 3, and 4). In year 5. revenue growth is projected to decline to 9%. Thereafter, growth in revenue, earnings and cash flow is projected to equal 4%. Operating costs excluding depreciation in year one are projected be $2.6 billion. In all future years, operating costs excluding depreciation are projected to remain the identical percentage of revenue as they are in forecast year one. At time zero, Food 'n' Stuff has net property, plant and equipment of $2 billion. This will be depreciated evenly over 10 years. Assume that in forecast year 5 there will be capital expenditure of $0.3 billion. Food 'n' Stuff currently (at time zero) holds $0.7 billion of net working capital, and net working capital grows at a constant 9% a year over forecast years one to five. Assume a corporate tax rate 21%, the cost of capital for the firm equals 8.1%, and the company owes outstanding debt of $5.1 billion. The first cash flow will occur one year from today. What is the fair value of equity for Food 'n' Stuff