Consider the following abbreviated financial statements for Boathead Enterprises:

BOATHEAD ENTERPRISES 2014 and 2015 Partial Balance Sheets
Assets								Liabilities and Owners Equity
		2014			2015					2014			2015
Current assets	$	946		$	1,008			Current liabilities	$	385		$	404
Net fixed assets		3,907			4,600			Long-term debt		2,029			2,197
								Equity		2,439			3,007

BOATHEAD ENTERPRISES 2015 Select IncomeStatement Info
Sales	$	12,340
Costs		5,920
Depreciation		1,050
Interest paid		190

The tax rate is 35%. Long term debt trades at par. The firm has 1,000 shares outstanding. Free Cash Flow to the Firm will grow at 2% and the Free Cash Flow to Equity will grow at 7% forever. The weighted average cost of capital is 12%. The cost of equity is 20%. Construct the income statement.

1) What is the Free Cash Flow to Equity for 2015?

The answer is NOT 38.80