Make the following assumptions:

Growth Rate after 2022 = 3% Required Return on Equity = 15% Required Return on Debt = 6.25% Weighted Average Cost of Capital (WACC) = 12% Current MV of Equity = $700 Current MV of Debt = $300 Corporate Income Tax Rate = 20% (Hint the line repayment of loan principle indicates that they will take out a $100 loan in 2024)

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What should the equity value of this firm be as of 12/30/2021? Use the Flow to Equity (FTE) method.

On December 30th,2021 you are given the following income statement projections: \begin{tabular}{lrrrrr} \multicolumn{1}{c}{ Income Statement } & 2021 (actual) & 2022 & 2023 & 2024 & 2025 \\ Revenue & 341 & 341 & 362 & 412 & 421 \\ - Cost of Goods Sold & 211 & 215 & 234 & 252 & 260 \\ - Depreciation & 50 & 51 & 53 & 65 & 66 \\ EBIT & 80 & 75 & 75 & 95 & 95 \\ \cline { 2 - 6 } - Interest Expense & 9 & 10 & 10 & 15 & 15 \\ Taxable Income & 71 & 65 & 65 & 80 & 80 \\ - Income Tax Expense & 14.2 & 13 & 13 & 16 & 16 \\ Net Income & 56.8 & 52 & 52 & 64 & 64 \\ - Dividends & 18.50 & 20.35 & 22.39 & 24.62 & 27.09 \\ \cline { 2 - 6 } Addition to Retained Earnings & 38.30 & 31.65 & 29.62 & 39.38 & 36.91 \end{tabular} \begin{tabular}{lrrrrr} \multicolumn{7}{c}{ In addition, you are given the following cash flow items: } \\ Change in Net Working Capital & 3 & 1 & 7 & 13 & 1 \\ Net Capital Expenses & 10 & 10 & 112 & 10 & 10 \\ Repayment of Loan Principle & 0 & 0 & 0 & 100 & 0 \end{tabular} On December 30th,2021 you are given the following income statement projections: \begin{tabular}{lrrrrr} \multicolumn{1}{c}{ Income Statement } & 2021 (actual) & 2022 & 2023 & 2024 & 2025 \\ Revenue & 341 & 341 & 362 & 412 & 421 \\ - Cost of Goods Sold & 211 & 215 & 234 & 252 & 260 \\ - Depreciation & 50 & 51 & 53 & 65 & 66 \\ EBIT & 80 & 75 & 75 & 95 & 95 \\ \cline { 2 - 6 } - Interest Expense & 9 & 10 & 10 & 15 & 15 \\ Taxable Income & 71 & 65 & 65 & 80 & 80 \\ - Income Tax Expense & 14.2 & 13 & 13 & 16 & 16 \\ Net Income & 56.8 & 52 & 52 & 64 & 64 \\ - Dividends & 18.50 & 20.35 & 22.39 & 24.62 & 27.09 \\ \cline { 2 - 6 } Addition to Retained Earnings & 38.30 & 31.65 & 29.62 & 39.38 & 36.91 \end{tabular} \begin{tabular}{lrrrrr} \multicolumn{7}{c}{ In addition, you are given the following cash flow items: } \\ Change in Net Working Capital & 3 & 1 & 7 & 13 & 1 \\ Net Capital Expenses & 10 & 10 & 112 & 10 & 10 \\ Repayment of Loan Principle & 0 & 0 & 0 & 100 & 0 \end{tabular}