Prokter and Gramble (PG) has historically maintained a debt equity ratio of approximately 020 its current stock price is $50 per share, with 25 billion shares outstanding the firm enjoys very stable demand for its products, and consequently it has a low equity beta of 0.5 and can borrow at 42% just 20 basis points over the risk-free rate of 4.0%. The expected return of the market is 100% and PG's tax rate is 35% a. This year, PG is expected to have free cash flows of $6.0 billion. What constant expected growth rate of free cash flow is consistent with its current stock price? b. PG believes it can increase debt without any serious risk of distress or other costs. With a higher debt equity ratio of 0.5, it believes its borrowing costs will rise only slightly to 4.5%. If PG announces that it will raise its debt-equity ratio to 05 through a leveraged recap, determine the increase or decrease in the stock price that would results from the anticipated tax savings a. This year, PG is expected to have free cash flows of $6.0 billion. What constant expected growth rate of free cash flow is consistent with its current stock price? The constant expected growth rate of free cash flow is consistent with its current stock price is % (Round to two decimal places) b. PG believes it can increase debt without any serious risk of distress or other costs. With a higher debt equity ratio of 0.5 it believes its borrowing costs will rise only slightly to 45% If PG announces that it will raise its debt equity ratio to 0.5 through a leveraged recap, determine the increase or decrease in the stock price that would result from the anticipated tax savings Increase or decrease) in stock price is $ (Round to the nearest cent. Use a minus sign to indicate a negative number)