Problem 1 (8 Marks) Tugay Boat Annie Ltd. most recent free cash flow was $100,000. The company expect free cash grow at 30% per year for the next three years and then be stable in future years. The company's of equity (r) is 12% and its WACC is 11%. The company has $400,000 in long-term debt and has 10,000 common shares outstanding. Required: a. Calculate Tug Boat Annie's current common share price? (6 marks) b. Below are two industry average multiples. Tug Boat Annie's capital structure is significantly different than other companies in the same industry Industry Averages EBITDA multiple 2.5x P/E multiple 6.OX Which multiple would be most suitable to use to estimate Tug Boat Annie Ltd. value relative to companies in the same industry? You do not need to calculate anything, just explain briefly. (2 marks)