Choose a firm with both equity and debt. $($Most banks are not well suited to this assignment$)$ Use the FINRA website or a Bloomberg terminal to find bond information. $($please provide link to finished excel sheet$)$

$1.$ Find the market value of equity and use the book value of debt as an estimate of the market value of debt.

$2.$ Calculate the weights of equity and debt.

$($Hint: The sum of the market values of debt and equity is the denominator.$)$

$3.$ Find the highest yield on a long$-$term bond issued by the firm.

$4.$ Estimate the annual market return and risk$-$free rate using information from the beta assignment.

$5.$ Find or calculate Free Cash Flow to the Firm in the preceding $5$ years. Calculate the annual growth rate as well as the $4$ year CAGR.

$($Hint: FCFF $=$ Operating Inc $(1-$ tax rate$)+$ Depreciation $-$ NWC Inv $-$ CapEx$)$

$($Alternatively: FCFF $=$ Net Income $+$ Depreciation $+$ Int Exp $(1-$ tax rate$)-$ NWC Inv $-$ CapEx$)$

$6.$ Calculate WACC based on the estimated FCFF growth and market values.

$($Hint: Use the growing perpetuity formula.$)$

$7.$ Calculate the Equity Beta using CAPM and the Asset Beta using the Hamada equation.

$8.$ Find the FCFF growth rate that matches the Equity Beta to the measured beta in Bloomberg or FINRA. $($You may use Solver or trial and error$)$ The WACC, required return on equity, equity beta, and asset beta must all change when the FCFF growth rate changes.