The following data apply to the next six questions. Delta Inc. is growing quickly. Revenues, which are forecast to be $500 million in one year, are expected to grow at 10% per year for the two years after that, 8% per year for the next two years, and 6% per year after that. Expenses including depreciation are 60% of revenues. Net investment, including net working capital and capital expenditures less depreciation, is 10% of revenues. Because all costs are proportional to revenues, net cash flows (sometimes referred to as free cash flow) grows at the same rate as do revenues. Delta is an all-equity firm with 12 million shares outstanding. Assume that Delta has a 35% tax rate and the company's stock has a beta of 1.5. The risk-free rate is 4%, and the market risk premium is 8%. 21 of 30 4. Marks What rate should be used to discount the firm's cash flows? O a. 6.00%. O b. 9.50%. O c. 12.00% O d. 15.00%. O e. None of the above. Unsure