A company initially has no debt. Its operations will generate a free cash flow in one year that will be either $100 million (with probability 48%) or $51 million. There will be no further cash flows. Suppose that the firm's cost of equity is 14%. There are 3 million shares outstanding. The Modigliani-Miller assumptions hold. A. What is the equity price per share? Report an answer in dollars and cents. The price is $ per share. B. Suppose the firm raises $38 million through the sale of debt that pays 5% interest and is paid in full in one year. The full $38 million of proceeds are used to buy back shares of stock today at the market price. 1. What should be the total value (in $ millions with three digits after the decimal) of the remaining stock after the buyback? The stock is worth $ million. ii. What are the possible cash flows to equity holders per share? Report in dollars and cents. If the FCF is $100 million, the cash flow per share to equity holders will be $ If the FCF is $51 million, the cash flow per share to equity holders will be $ iii. What is the expected cash flow to equity per share? S iv. Show that the result from iii is consistent with Proposition II. First, report the debt-to-equity ratio for the levered firm at time 0 as a decimal figure with four digits after the decimal (e.g.. .5324 instead 0 153.24%). The D/E ratio is Next, insert that ratio in the proposition II formula to find the return on levered equity as a percent figure with three digits after the decimal. The levered equity return should be %. Use that return along with your answer from B.i. to find the expected total equity cash flow next year (in $5 millions with three digits after the decimal) as (1+levered return) "E. The expected equity value next year will be $ million. Finally, convert expected cash flow into a per-share number in dollars and cents. The expected equity cash flow per share will be $ per share. C. Assume now that the corporate tax rate is 31% and that the possible free cash flow (accounting for the tax) are still $100 million and $51 million. The firm issues $38 million of debt as in part B. What is the value of equity? Report a figure in $ millions with three digits after the decimal. The equity is worth $ million.