Based $on$ the data given below, calculate:

$a.$ The $FCFF(Free$ Cash Flow $to$ the Firm$)$ for the high growth phase and stable phase

$b.$ The terminal value $of$ the firm

Base year Values $(in$ lakhs$)$

Revenues $5000$

EBIT $1200$

Capex $400$

Depreciation $250$

Net working Capital $25\%of$ Revenues

Corporate tax $25\%$

Paid $up$ Equity $500$

Market value $of$ Debt $1200$

High growth period $4$ years

Revenues $25\%$

EBIT $25\%$

Depreciation $25\%$

Capex $25\%$

Net working Capital $25\%$

$\frac{D}{E}$ ratio $1$:$1$

Cost $of$ debt $6$

Risk free rate $7$

Risk premium $10$

Beta $1\mathrm{.}2$

Stable Phase

Revenues $10\%$

EBIT $10\%$

Depreciation $-$

Capex Zero $by$ adjusting for depreciation

Net working Capital $25$

$\frac{D}{E}$ ratio $2$:$3$

Cost $of$ debt $6$

Risk free rate $6$

Risk premium $11$

Beta $1\mathrm{.}1$