On April 1st, 2016, a large hedge fund wants to invest in stocks of Ford Motor Company. They think the current market valuation is not fair and decide to use DCF (FCF) valuation to estimate the fair share price. The corporate tax rate is 28% and Ford has 3.90B net shares outstanding. Use the excel file with market data on Ford's stock price, the S&P 500 index and interest rates as well as Ford's balance sheet, income statement and cash flow statement to answer the following questions.

a)Estimate Ford's Equity Beta using the daily (excess) stock returns and market (excess) return observations as provided in the excel file.

b)Use the CAPM model to estimate Ford's cost of equity. The hedge fund uses the annualized return over the last 10 years (last 2500 trading days) to calculate their expectation of the market return (i.e. 6.72%). They use government bonds with a very good credit rating and a very long maturity to estimate the risk-free rate (i.e. 2.21%).

c)Calculate Ford's cost of capital (WACC) using the most recent available book values of debt (long-term debt only) and equity (note: you may use market values instead as long as you can cite the source). The hedge fund assumes that Ford's cost of debt (before-tax) is similar to the current yield on long-term corporate bonds of similar credit quality (i.e. 3.64%). The hedge fund thinks that Ford's corporate debt has a credit rating of "A".

d)What is Ford's Free Cash Flow (FCF) in year 2015 using the FCF formula discussed in class? You can rely on the current cash flow statement for the most recent depreciation and the capital expenditures and assume that net working capital has not changed in the most recent period.

e)Ford assumes that its sales are going to grow by 2% per year for the next 10 years while the operating margin (EBIT margin) will stay constant at the 2015 level. Ford further assumes that depreciation and amortization will grow by 1% per year, net working capital will stay constant and capital expenditure will increase by 3% per year, for the next ten years respectively. What's the present value of Ford's operating assets for the "explicit period" (next ten years) using DCF and the WACC you found in (c)?

f)Assuming a 0.5% perpetual growth rate of the FCF after the end of the explicit period, calculate the Terminal Value, Enterprise and Equity Value and the fair share price for Ford. (you can use the book value of total liabilities as an estimate for the firm's debt)

g)What is the range of fair share prices for Ford, if you assume a perpetual growth rate between 0% and 1%?

h)Would you recommend the hedge fund to invest in Ford Motor Company given your results in (e) and (f) and the current (market) stock price of Ford Motor Company of $12.70? Explain.

please help me