Autonomous Vehicles, Inc. has some new products that it expects to lead

to high growth in the near future. It has given analysts the following

forecasts for the next three years:

The firm$$s debt has a current market value of $$900,000$ and it has $$75,000$

in marketable securities$.$ There are $500,000$ common shares outstanding.

The expected tax rate is $25\%,$ and the WACC is estimated to be $10\%.$

a$.$ Calculate the free cash flow for each of the next three years.

b$.$ After $2019$ free cash flow growth is expected to slow to $7\%$ per year

permanently. What is the value of the stock today?

c$.$ Without the new products, free cash flow in $2020$ would be $$100,000$

and it would grow at $7\%$ per year forever. What is the value of the

stock if the new products aren$$t introduced? $202020212022$

Depreciation $39,45055,28571,080$

EBIT $329,062381,712434,363$

Investment in Operating Assets $91,65066,30029,250$