F is expecting a decline in her competitive edge overtime. To value her company, she has accumulated the following information: Current sales are $600 million. Over the next five years, the annual sales growth rate and the net profit margin are projected to be as follows:

2 3 4 1 20% 5 8% 16% 12% 10% Year Sales growth rate Net Profit Margin 14% 13% 12% 11% 10.5% Beginning in Year 6, FCFE will increase at a constant rate of 7% indefinitely Capital expenditures (net of depreciation) in the amount of 60 percent of the sales increase will be required each year. Investments in working capital equal to 25 percent of the sales increase will also be required each year. Debt financing will be used to fund 40 percent of the investments in net capital items and working capital. The beta of Felina Camp is 1.10. Risk-free rate of return is 6.0 percent and the equity risk premium is 4.5 percent There are 70 million outstanding shares Calculate a) Cost of equity (3 marks) b) Value per share of the company using FCFE model (10 marks)