IndiOffice Int. currently has a net income of 70 million rupees. They have capital expenditures of 90 million rupees and depreciations of 60 million. The growth in these is expected to be 2/3 of the growth in net income. The firms non-cash working capital is at 400 million, with an expected annual growth of 3%. Their principal payments on debt equals the depreciation expense. The firm believes it will be necessary to take up a loan of 300 million rupees in tree years from now, to pay for a very promising project. They will not take on any other debt this year. In the other years, they plan to pay for 50% of the capital expenditures by taking on new debt. Their current short-term growth in net income is 7%, but they believe it will increase to 9% in year three, due to the project. It will remain at this level for three years before it starts deceasing and reach a long-term growth of 4% in year 10.

i. Estimate the equity value of the firm.

ii. Assume now that the firm owns 10 000 Equinor-shares trading at 180,90. The exchange rate between the Norwegian Krone and the Indian Rupee is: 100 NOK = 791,88 INR. It also owns 30 000 shares in a small firm called MegaSun. MegaSun is not listed, but its dividend per share is currently 15 rupees. The dividends are expected to grow 3,5% annually, and MegaSun has a cost of capital of 7,5%. What is the firms value of equity?