As a treasury analyst at Iftech Ltd$.($IF$),$ you are trying to value a potential target company Jai Krishnan Ltd$.($JK$).$ The capital structure ratio $($D$/$E$,$ i$.$e$.$ market value of debt to market value of equity$)$ currently for $JKLtd.$ is $55\%$ and IFLtd. is $20\%.$ Note that the market value of firm is the sum of market value of equity and market value of debt. The regression analysis between $JK$ Ltd$.\text{'}$s stock returns and market returns returned a significant coefficient of $0\mathrm{.}8($this is the beta equity for $JKLtd.)$ for the market returns. The corporate tax rate is $35\%.$ The YTM of the T$-$bill is $6\mathrm{.}94\%$ p$.$a$.$ EAR, and the slope of the JK Itd security market line is $8\%$ p$.$a$.$ EAR $($market risk premium$).$ The Table I provides the projections of parameters of income statement and balance sheet for JK Ltd$.($All values in Rs$.$ Million$).$

Table I

$\backslash$table$[[$Table I $-$Years,Year $0,$Year $1,$Year $2,$Year $3],[1.$ Sales Revenues,,$2000,2750,2500],[2.$ Cost of goods sold,,$900,1150,1020],[3.$ Operating expenses $($excl$.$ depreciation$),,120,180,160],[4.$ Depreciation and Amortization expense,,$80,132,108],[5.$ Change in Operating Net Working capital,,$142,126,-100],[6.$ Net Fixed assets,$400,500,620,800]]$

t the end of $3$ years, the growth rate in FCFF is $5\%.JKLtd.$ has recently taken a loan with a $"$BBB ting and has an interest coverage ratio of $2\mathrm{.}6,$ indicating a default spread of $1\mathrm{.}47\%.$ There are $n$ eferred equity holders for $JK$ Ltd$.$

$14$ Marks$]$ What is the cost of capital for $JKLtd?$

$[4$ Marks$]$ What are the Projections of the planning period cash flows $($FCFF for Year $1$ to Year Terminal value of the firm at end of Year $3?$

$[2$ Marks$]$ What is the value of the firm $JKLtd.$ today $($Year $0)?$ Show all the steps.