Suppose you have been provided the following Financial Statements for Clapple Inc.

Other Relevant Information:

Analysts anticipate the FCFF to grow by $10\%$ over the next $4$ Years $($Years $1$ to $4),$

and then by $4\%$ thereafter $($Year $5$ onwards$)$

The Firm's Weighted Average Cost of Capital $($WACC$)$ is $8\mathrm{.}63\%$

The Firm's Effective Tax Rate is $30\%$

sing the information provided, answer the following:

a$)$ Calculate Clapple Inc. Free Cash Flows to the Firm $($FCFF$)$ in $2023$

b$)$ Using the Analysts' forecasts, calculate the Enterprise Value of Clapple Inc. using the

WACC approach. Be sure to show all of your work.

c$)$ The management of Clapple have heard that they can increase the value of the

firm by increasing debt. They would like to refinance their capital structure so that it

is $95\%$ financed with debt and $5\%$ financed with Equity. Discuss briefly the advantages

and disadvantages of this idea.