Analyze the following Equation 4 by describing (i) each individual part of the equation, (ii) the mathematical relationship among the parts, (iii) the purpose of the equation.

n Equation 4 Free Cash Flowi (1 + Weighted Average Cost of Capital)i t=1 Note: Use the following to understand the denominator. + + (% of Debt) (Cost of Debt, after tax) (% of Common) (Cost of Common) (% of Preferred) (Cost of Preferred) Weighted Average Cost of Capital +