please provide more than just answers I want to understand how to do it

7.(30 points) Free Cash Flow Valuation You have gathered XYZ Corporation's financial statements in the following tables. Assume there will be no sales of long-term assets in 2010. Calculate forecasted free cash flow to the firm (FCFF) and free cash flow to equity (FCFE) for 2010. Note that figures in brackets indicate a negative number. All numbers reported are in millions. Income Statement 2009 Actual 250 2010 Forecast 300 120 180 35 100 50 Sales Cost of goods sold Gross profit SG&A Depreciation EBIT Interest expense Pre-tax earnings Taxes (at 30%) Net income 95 15 80 24 56 Balance Sheet 2010 Forecast 2009 Actual 10 15 30 Cash Accounts receivable Inventory Current assets Gross property, plant, and equipment Accumulated depreciation Total assets SO 30 40 80 400 (190) 290 300 (140) 210 20 20 40 Accounts payable Short-term debt Current liabilities Long-term debt Common stock Retained earnings Total liabilities and owner's equity 114 290 A. (5 points) Calculate Investment in Fixed Capital (FCInv). B. (5 points) Calculate Investment in Working Capital (WCInv). C. (5 points) Calculate Free Cash Flow to Firm (FCFF). D. (5 points) Calculate Net Borrowing and Free Cash Flow to Equity (FCFE). E. (5 points) XYZ's beta is estimated to be 1.25. The current market risk premium is 5%. The risk- free rate of interest is 2%. What is the estimated required return of equity for XYZ? CAPM: r;=rf + (Vm -rf) market risk prem F. (5 points) XYZ's growth rate is estimated to be 5%. The firm has 6 million shares outstanding. What is the intrinsic value for XYZ's share price? (3 points) If the market price for the firm is currently 50 dollars per share, what is your investment decision? (2 points) Page 10 of 10