Use the information in the attachedspreadsheet about Income statement and Balance Sheet of a Firm. Answer the following question. Please show steps. Thank you.

1. Calculate Required Return K and WACC
2. Calculate the firms average interest rate on its debt
3. Calculate Free Cash Flows to equity (FCFE)
4. Calculate the Value of Equity per share if you expected FCFE to grow at 20% next year, at 15% the following year and then at a sustainable rate of ROE*b
5. Calculate Free Cash Flows to the firm (FCFF)
6. Calculate the value of the firm if you expect FCFF to grow at 20% next year, at 15% the following year and then at a sustainable rate of 2%
7. Calculate the value of the firm and use the value of the firm to calculate the value of equity per share
8. Calculate the value of equity using the Constant Growth Dividend Discount Model. Project dividends to grow at 40% next year, at 15% the following year and then at a constant sustainable rate of ROE*b
9. Based on your answer in 4,7,8. Is the stock correctly priced? Explain
10. Calculate the firms Residual income

Income Statement Sales GOGS Depreciation S&G Expense Loss on sale EBIT Interest Expense Net Income 85,000 17,000 6,350 17,650 950 43,050 3,936 23,468 Tax Rate CAPEX Risk Free Rate Beta Market Risk Premuim Number of shares issued Retention Ratio Market Price 40% 9,000 4% 1.2 6% 35,000 20% $11 Balance Sheet 2014 Account Receivable 5,000 Inventory 3,500 PPE 127,000 Account Payable 1,300 Debt 82,000 Equity 113,468 2013 5,020 3,480 118,000 1,280 82,000 90,000 Calculate Required Return K and WACC Calculate the firm's average interest rate on its debt Calculate Free Cash Flows to equity (FCFE) Calculate the Value of Equity per share if you expected FCFE to grow at 20% next year, at 15% the following year and then at a sustainable rate of ROE*b Calculate Free Cash Flows to the firm (FCFF) Calculate the value of the firm if you expect FCFF to grow at 20% next year, at 15% the following year and then at a sustainable rate of 2% Calculate the value of the firm and use the value of the firm to calculate the value of equity per share Calculate the value of equity using the Constant Growth Dividend Discount Model. Project dividends to grow at 40% next year, at 15% the following year and then at a constant sustainable rate of ROE*b Based on your answer in 4,7,8. Is the stock correctly priced? Explain Calculate the firm's Residual income