ABC Corp has invested in projects with ROE of 15% and expects an EPS of $ 5 next year.

The company maintains a 60% dividend ratio and the share price is currently $ 50.

The company is contemplating an expansion plan which will require an initial investment of $1,000,000. However, the plan is expected to generate a free cash flow of $ 90,000 in the first year which is then expected to grow at a constant rate of 4% per year forever.

The plan is to be funded entirely by shareholders.

Should the company go ahead with the expansion plan?

Explain all relevant calculations.