Balance Sheet: 31 Dec 2019 Assets EGP Liabilities and Shareholders' Equity EGP Cash and Cash Equivalents 100.0 Accounts Payable 250.0 Accounts Receivable 200.0 Short and Long-term Debt 500.0 Inventory 200.0 Equity 250.0 Fixed Assets, Net 500.0 Total Assets 1,000.0 Total Liabilities and Shareholders' Equity 1,000.0 Income Statement: 1 January to 31 Dec 2020 EGP Revenues 1,000.0 Operating Expenses -700.0 EBIT 300.0 Financing Expenses (Interest) -50.0 EBT 250.0 Tax Expense (Rate = 50%) -125.0 Net Income 125.0 1) Reconstruct the above balance sheet to express it in the form of investment in net assets and funding of net assets using a mix of debt and equity only? (Hint: Think about net investment in working capital). 2) Calculate ROE and decompose its value using two different methods. You do not need to derive any of the two equations yet you will get a 1% bonus if you derive the second method. In both methods, show all your calculations. 3) Assume that your minimum required rate of return (which is = cost of equity) is 50%/annum and the terminal annual growth rate in net income is 5%. If you plan to buy 100% of the firm's equity, how much should you pay on 31 Dec 2019? (Hint: Use the ROE calculated in question 2 above and a valuation formula you learned during the course). 4) If the cost of equity declines from 50% to 25%/annum, what is the maximum price you will be willing to pay to acquire 100% of equity? Show your calculations and assume that ROE remains unchanged. 5) Based on a cost of equity of 25%/annum as in question 4 above, calculate EVA and explain how the CEO managed to maximize shareholders' wealth. (Be precise).