let x = 1

5) Machka Food Corporation is expected to generate the following free cash flows over the next four years: Year 1 2 3 FCF (SMillion) 2x 3x x3 4x After then, the free cash flows are expected to grow at the industry average of 1x% per year. a) If Machka Food's weighted average cost of capital is 20%, compute the firm value by using discounted free cash flow model. (15 pts) b) If Machka Food has debt of $8x million, and x million shares outstanding, estimate its share price. (5 pts)