Wheelock, once solely a Hong Kong property developer, is now a mutli-conglomerate spanning the globe. It has recently made an announcement that it will privatize itself and distribute shares of the companys subsidiaries (Wharf and Wharf REIT) along with HKD 12 per share. You want to determine if there is an arbitrage opportunity. You take a look at the companys financials from their most recent earnings release. They forecast that next year, (2021) will generate HKD45,000,000,000 in revenue, which they are forecasting to grow over the following three years at 12% and then 4.5% onward. They believe that they will maintain a 75% gross margin and a 30% net margin indefinitely. The company also currently has HKD52,850,000,000 of debt outstanding with an average coupon rate of 1.4% that will begin to be paid down by HKD6,500,000,000 per year from 2022-2024 before reaching an equilibrium level. Depreciation charges consists of HKD750,000,000 and will decrease by 15% from 2021-2024 before reaching a steady state. Fixed Cost will remain 100% equal to depreciation charges. Working Capital has consistently been maintained as 5.7% of revenue. The companys WACC is determined to be 7.5% in its high growth phase and 5.6% onward. The companys tax rate is 18%.

1. a. What is the FCFF for 2021?

b. What is the FCFF for 2025?

c. What is the firm value/enterprise value of Wheelock using the DCF Method?