In year$1,$ AMC will earn $$$$2$ comma $300$ before interest and taxes. The market expects these earnings to grow at a rate of $3\mathrm{.}1\%$ per year. The firm will make no net investments$($i$.$e$.,$ capital expenditures will equal$$ depreciation$)$ or changes to net working capital. Assume that the corporate tax rate equals $25\%.$ Right$$ now, the firm has $$$$5$ comma $750$ in$$ risk$-$free debt. It plans to keep a constant ratio of debt to equity every$$ year, so that on average the debt will also grow by $3\mathrm{.}1\%$ per year. Suppose the$$ risk$-$free rate equals $5\mathrm{.}1667\%,$ and the expected return on the market equals $11\mathrm{.}367\%.$ The asset beta for this industry is $2\mathrm{.}07.$d$.$ Using the APV$$ method, what is$$ AMC's total market$$ value, V Superscript L$?$ What is the market value of$$ AMC's equity?

e$.$ What is$$ AMC's WACC? $($Hint$$: Work backward from the FCF and V Superscript L$.)$

f$.$ Using the$$ WACC, what is the expected return for AMC$$ equity?

g$.$ Show that the following holds for$$ AMC: beta Subscript Upper A Baseline equals StartFraction Upper E Over Upper D plus Upper E EndFraction beta Subscript Upper E Baseline plus StartFraction Upper D Over Upper D plus Upper E EndFraction beta Subscript Upper D

$.$

h$.$ Assuming that the proceeds from any increases in debt are paid out to equity$$ holders, what cash flows do the equity holders expect to receive in one$$ year? At what rate are those cash flows expected to$$ grow? Use that information plus your answer to part $($f$)$ to derive the market value of equity using the FTE method.