9.24: Question 3 Two-stage DCF You have been provided with the following information about company ABC Inc. After-tax operating income in 2020 was $30m, ABC facing a corporate tax rate of 20% Capex was $18m and depreciation $6m The non-cash working capital increased by $4m during the course of 2020 Assume that the after-tax operating income, capital expenditures, depreciation and non-cash working capital all are expected to grow 6% a year for the next 3 years. After year 3 you expect the growth rate to drop to 2% and you anticipate the ROC to be stable at the same level that the firm maintained during the 3-year high growth period. The cost of capital in both the high growth phase and steady state is expected to be 7%. 1.(1.5 points) Estimate the FCFF for the next 3 years. 2.(0.5 point) Estimate the reinvestment rate. 3. (1.5 points) Estimate the terminal value. 4. (1.5 points) Estimate the value per share today if the firm has $20m cash balance, $70m in debt and 20m of shares outstanding