FLOW TO EQUITY

Based on the information below, calculate the flow-to-equity for year 1-3 and use the Flow-to-Equity method to calculate the value of the equity in the beginning of year 1. 4 Rent Operating cost NOI Interest 1 180 000 000 24 000 000 156 000 000 56 475 191 2 182 700 000 24 480 000 158 220 000 57 059 642 3 185 440 500 24 969 600 160 470 900 57 636 516 Debt Equity 1 129 503 819 1 141 192 846 1 152 730 328 1 164 091 371 760 795 231 The firm has a perpetually constant debt-to-equity ratio. The marginal cor- porate tax rate is 25% and the cost of capital for unlevered equity is 8.0%. The figures for rent, operating cost, NOI and interest are in the end of the years and the figures for debt and equity are in the beginning of the years