Task 3:

The company financials are given below:

Net income		200m
Depreciation expense		72m
Interest expense		120m
Increase in net working capital investment		32m
Increase in fixed capital investment		136m
Market value of debt		1,440m
Cost of debt		8.5%
Cost of equity		14%
Tax rate		20%
Constant growth rate of free cash flow (forecasted)		4% (per year)
Capital Structure:
Debt	40%
Equity	60%
Number of shares outstanding	20,000,000

Find the following:

1. Free cash flow to firm (actual), Free cash flow to firm (next year forecast), Weighted average cost of capital, Value of the company (using FCF capitalization approach), Value of equity and Intrinsic value per share.