Next Seven Questions: Icarus Airlines is proposing to go public. Management plans to maintain debt at 30% of the company's present value, and they believe that at this capital structure the company's debt holders will demand a return of 6% and stockholders will require 11%. The company is forecasting that next year's cash flow will be $68 million. Afterwards, from year two until year five, the cash flow will grow by 4% a year. After year five, the growth rate will be zero. The tax rate is 40%. Find the cost of capital. Select one: O a. 7.5% b. 10% O c. 11% O d. 8.78% Find the present value of the free cash flows for the first five years. Select one: O a. $324 million b. $286 million c. $250 million d. $881 million Find the terminal value at year five. Select one: O a. $906 million O b. $595 million c. $611 million d. $525 million