The following table lists the Income statement and Balance sheet for First American Furniture Company Income Statement 2017 2018 Balance Sheet 2017 2018 Revenue $516 $630 Current assets $350 $420 Depreciation 30 35 Prop, plant, & Equip. 500 520 Other operating costs 400 480 Total assets $850 $940 Income before taxes 86 115 Current liabilities 130 150 Taxes 30 44 Long-term debt 50 80 Net income 56 71 Total liabilities $180 $230 Dividends 20 26 Shareholders equity $490 $480 Earnings per share $0.56 $0.95 Total L and equity $850 $940 Dividend per share $0.20 $0.26 Capital expenditures 45 50 # of Common shares 100 100 You are a financial analyst at RBC. Using the data above, you want to determine the value of First American Banks stock using the Free Cash Flow to Equity (FCFE) model. You believe that the companys FCFE will grow at 35% for three years and 11% thereafter. Capital expenditures, depreciation, working capital, and net debt are all expected to increase proportionately with FCFE. The required rate of return on equity is 16%. (keep two decimal places please.) Calculate the amount of FCFE per share for the year 2018. (sample answer: $5.15) Calculate Projected 2021 terminal value per share based on constant growth of 11% (sample answer: $25.15) Calculate the current value of a share of the stock based on the two-stage FCFE model. (sample answer: $25.15)

The following table lists the Income statement and Balance sheet for First American Furniture Company 2017 2018 Income Statement 2017 2018 Revenue S516 5630 Balance Sheet Current assets Prop. plant,& Equip $350 $420 Depreciation 30 35 500 520 400 480 Total assets $850 $940 Other operating costs Income before taxes 86 115 130 150 Current liabilities Long-term debt Taxes 30 44 50 80 Net income 56 71 Total liabilities $180 $230 Dividends 20 26 Shareholders equity $490 $480 $0.56 $0.95 $850 $9.40 Earnings per share Dividend per share # of Common shares Total Land equity Capital expenditures $0.20 $0.26 45 50 100 100