Question 2 (20 marks) Lizo is a public company with the following characteristics in the most recent year): - At the start of the year, the firm had book value of equity of $400 million, debt outstanding (book value as well as market value) of $200 million, and cash balance of $100 million. These numbers did not change during the most recent year. The cost of capital for the firm is 6% next year, 8% the year after and 9% thereafter (in perpetuity). Shares outstanding: 200 million After-tax operating income: $100 million Revenues: $800 million - - a) Lizo's after-tax operating income is expected to grow 20% in each of the next 3 years. You expect Lizo to maintain its current return on invested capital (ROIC) forever. Estimate the free cash flows to the firm in each of the next 3 years. (8 marks)