Please solve both parts

a. What constant expected growth rate of free cash flow is consistent with its current stock price?

b. Determine the increase or decrease in the stock price that would result from the anticipated tax savings.

Prokter and Gramble (PKGR) has historically maintained a debt-equity ratio of opproximately 0.21 . Its current stock price is $55 per share, with 2.1 billion shares outstanding. The firm enjoys very stable demand for its products, and consequently it has a low equity beta of 0.525 and can borrow at 43%, just 20 basis points over the risk-free rate of 41% The expected retum of the market is 10.3%, and PKGR s tax rate is 23% a. This year, PKGR is expected to have free cash flows of $6.1 balion. What constant expected growth rate of free cash flow is consistent with its current stock price? b. PKGR believes it can increase debt without any serious risk of distress of other costs With a higher debt-equily ratio of 0 525. 2 believes its borrowing costs will rise only slightly to 46%. If PKGR announces that it will raise its debt-equity ratio to 0.525 through a laveraged recap, defermine the increase or decrease in the stock price that would result from the anticipated tax savings a. This year, PKGR is expectod to have free cash fows of $6.1 bilion What constant expected growth rate of free cash flow is consistent with its current stock price? The constant expected growth rate of free cash fiow is consistent with its current stock price is 4%. (Round to two decimal places)