Televista Corporation is expected to grow at a higher rate for 4 years; thereafter the growth rate will fall and stabilize at a lower level. The following information is made available in this regard. [15 Marks] Base Year (Year 0) Information Revenues: Rs. 1600 million EBIT: Rs. 240 million Capital Expenditure: Rs. 200 million Working capital as a percentage of revenues: 25% Depreciation: Rs. 120 million Tax Rate (all throughout): 35% Inputs for High Growth Period Length of the high growth period: 4 years Growth rate in revenues, depreciation, EBIT and CAPEX: 20% Working capital as a percentage of revenues: 25% Cost of debt (pre-tax): 15% Debt-Equity Ratio: 1.5:1 Risk-free rate: 12% Market risk premium: 7% Equity Beta: 1.25 Inputs for Steady State Growth Period Growth rate in revenues and EBIT: 10% CAPEX is offset by Depreciation Working capital as a percentage of revenues: 25% Cost of debt (pre-tax): 14% Debt-Equity Ratio: 1:1 Risk-free rate: 12% Market risk premium: 6% Equity Beta: 1.00 a. Derive the FCFFs for the years 1 to 5 based on information given. Do not use the Gordon growth model for this purpose. b. Assuming steady state growth rate (g) of 10% and the FCFFs derived earlier, derive the continuation value at time t=4 using the Gordon growth model. c. Calculate Enterprise Value of Televista Corporation today (t=0)