Problem #1 Free Cash Flow Model

ABC Company has an equity beta of 1.72 and a tax rate of 35%. What is the asset beta if the debt to equity ratio is 40%?

Using the answer from above, calculate the discount rate if the risk free rate is 2.75% and the market risk premium is 6.15%?

ABC Company had an EBIT last year of $15.6 million. Depreciation expense was $1.45 million. In other areas, ABC spent $1.75 million on capital expenditures and increased working capital by $0.865 million. What is ABC's Free Cash Flow for the year?

Using the information derived above, value ABC company assuming its FCF is expected to grow at a rate of 4.8%.