Please help with Question 5.2

Analyst C is carrying out a company analysis of Company XYZ, a company she is tracking. The analyst wants to use the free cash flow approach to value the company. She collated the following information that relates to Company XYZ. Current free cash flow to the firm Current free cash flow to equity Weighted average cost of capital Tax rate Free cash flow to the firm growth rate Free cash flow to equity growth rate Number of ordinary shares Current market share price R50 000 000 R40 000 000 13 28% 8% 10% 100 000 000 R15 The analyst calculated the beta of Company XYZ to be 1.8. She observed that the market risk premium is 5%, while the risk-free rate is 6%. Analyst C is also tracking two (2) other stocks: Company DEF and Company KLM. The analyst compiled the following information for these stocks: Forecast return Capital asset pricing model (CAPM)'s expected retum 12% 16.5% Company DEF Company KLM 15.5% 14% Mlipark Education Equities EQUTO2-6 Assignment March 2021 Page 5 of 6 Note to students: Show all calculations and round off your final answers to two (2) decimal places. 5.2 Determine the cost of_squity Company (2) Calculate the total firm value for Company CC by using the constant growth free cash flow to the firm (FCFF) valuation approach. (2)