Consider the following information about a firm.

Debt ratio = 35%

Cost of equity = 0.14

Cost of debt = 0.09

Tax rate = 25%

FCFs over the next 3 years and the growth rate of the cash flows after the third year are:

Year 1 FCF = 120 USD

Year 2 FCF = 250 USD

Year 3 FCF = 400 USD

After year 3, the company has a constant growth of 3% per year.

a) What is the value of the firm?

b) Evaluate the fair value of the firm’s single share, if IPOs of the firm provide for outstanding shares in the number of 1,000, and the market value of the firm’s debt is equal to 1,200 USD.