Q$2)$ Free Cash Flow Firm $($FCFF$)$

A company $s$ WACC $=10\%$ and its cost of capital is $k=16\%.$ The company has $100,000$ shares

outstanding. The company has debt $=$$$350,000.$

The FCFF is expected to be $$100,000$ for years $t=1$ and $t=2.$ FCFF is expected to grow at a rate of $g=346$

per year starting in year $t=3.$

a$)$ What is the Firm Value $V_0$ using FCFF$?$

b$)$ What is the expected price of the stock using FCFF$?$

The FCFE is expected to be $$50,000$ for years $t=1$ and $t=2.$ FCFE will then be $$150,000$ per year for each

year thereafter.

c$)$ What is the Market Value of Equity $V_0$ using FCFE?

d$)$ What is the expected price of the stock using FCFE.