TeleNovela Inc. currently has a net income of 1700 million Colombian Pesos (COP). It has capital expenditures of 1900 million COP and depreciations of 1600 million. The firm's non-cash working capital over the past few years has been 14 billion, and this is expected to remain unchanged. Capital expenditures and depreciation are expected to grow at the same rate as the net income. TeleNovela Inc. has principal payments on debt equal to the depreciation expense. The company currently finance 50% of the annual capital expenditures by taking on new debt and is expected to do so in the future as well. It does not expect to take on any other new debt. Their current short-term growth in net income is 7%, but they believe this will decrease towards a longterm growth rate of 4% over the next three years (first year of long-term growth is year 4 ). a) What is the firm's equity reinvestment rate? b) What is the firm's return on equity? c) What is TeleNovela Inc.'s free cash flows to Equity? d) Using the FCFE estimate from c, estimate the equity value of the firm. Use a cost of equity of 15%. e) Assume now that the firm owns 1000 shares in a small firm called MiniMoon. MiniMoon is not listed, but it's dividend per share is currently 2000 Colombian Pesos. The dividends are expected to grow 5% in perpetuity, and MiniMoon has a cost of equity of 10%. i. What is the value of the holding in MiniMoon? ii. With this holding, what is the value of TeleNovela Inc