The following are estimates for the annual EBIT of EasyJet Plc over the next few years:

Year	2014	2015	2016	2017	2018
EBIT (million)	360	370	400	420	430

(i) Describe what adjustments you need to do to these estimates to arrive at the Free Cash Flows of EasyJet for these years.

(ii) You have no numbers after 2018. Describe two methods by which you could estimate the value of its earnings stream after 2018? Which of these do you think is more reliable and why?

(iii) What does the beta of a company measure? Roughly, given what you know about the low cost airline business, do you think is the beta of EasyJet?

(iv) EasyJet Plc currently has a relatively low gearing (net debt to assets) of just over 10%. Do you think it could add value for its shareholders by increasing its gearing? Discuss the major considerations briefly