Durham Corporation currently has free cash flow (FCF) of $ 15 million. A well- respected stock analyst estimates that this FCF will increase by 8 % for the next 5 years. The analyst estimates that at the end of 5 years the company's terminal value will be based on the year 5 FCF and the long term FCF growth rate of 4%.

Suppose Durham has a beta of 1.6, the risk-free rate is 5%, and the market risk premium is 14%. The company has no debt and $10 million in excess cash on its balance sheet.Durham has 6 million shares outstanding.

1. Calculate the FCF's for years 1 - 5.

2. Calculate the terminal value for the slower growth period assuming all cash flows occur at year end.

3. Calculate the Enterprise value of Durham assuming all cash flows occur at year end.

4. Calculate an Equity value and per share value for Durham assuming all cash flows occur at year end.

5. Show how the per share value changes if you assume mid-year cash flows? Provide the detailed calculations on the excel sheet.

6. Suppose Durham had $40 million in debt and its WACC was 16%. Calculate the new per share value of Durham. Refer to the steps in 2-4 for guidance. Provide detailed calculations on the excel sheet.