Carbon Springs is a beverage company that reported the following numbers for the most recent fiscal year:

	Most recent year
Revenues	$2,000.00
EBITDA	$500.00
DA	$100.00
EBIT	$400.00
- Interest expenses	$50.00
Taxable Income	$350.00
Taxes	$105.00
Net Income	$245.00

During the year, the company reported capital expenditures (including acquisitions) of $200 million and an increase in non-cash working capital of $40 million.

You can assume that the company will continue to generate its current return on invested capital in perpetuity and that its effective tax rate is the marginal tax rate.

a)Assuming that operating income will grow at 8% a year for the next five years, estimate the free cash flows to the firm for the next five years.

b) At the end of year 5, the company is expected to become a mature business, growing at 2% a year in perpetuity with a cost of capital of 8% (mature company levels). Estimate the value of the business at the end of year 5.

c) Assume that the company's current cost of capital is 12% and is expected to stay at that level for the next 5 years, estimate the value of equity per share today. The total debt outstanding is $1 billion, the company's cash balance is $600 million and there are 150 million shares outstanding