You are a senior nancial analyst of a rm based in Sydney. You have been assigned with the task of training interns who recently joined your firm on how to use the free cash ow model to estimate the value ofa company. You have collected data on the following data: Year 2021 2022 2023 2024 2025 Long-term debt ($M) 50,000 52,000 49,000 52,000 55,000 Interest long-term debt ($M) 3,000 2,860 2,695 2,860 3,525? Working capital 1,5000 17,000 16,000 19,000 19,000 EBIT (SM) 45,000 55,000 57,000 55,000 60,000 Cost ofequity 0.10 0.12 0.10 0.13 WACC 0.13 0.14 0.15 0.16 Number of equity shares (Million) 4,000 Terminal growth rate 0.05 Tax rate 0.30 The company plans to invest 30% of the EBIT in capital projects each year. Depreciation in each year is expected to be 50% ofEBIT. Using the information, you have collected above, perform calculations to explain to interns as to how the following are calculated: i. Free cash flow to rm ii. Free cash to equity iii. Value of the rm according to the free cash ow to rm method iv. Value of the rm according to the free cash ow to equity method v. Estimated price of an equity share according to the free cash ow to rm method and the free cash ow to equity method Note: For parts i and ii prepare a table showing how free cash ow to firm and free cash ow to equity are calculated. Follow the example in the lecture notes for session 7'. Input data 2017 2018 2019 Long term debt 30,000 Number of equity shares 2,000 Corporate tax rate 0.30 Terminal growth rate 0.05 Change in long term Debt ($M) 0 2,000 EBIT ($M) 12,000 13,000 Interest on debt 800 900 Change in working Cap ($M) 1,000 3,000 Depreciation ($M) 22,000 22,500 Cap Spending ($M) 21,800 22,900 Cost of equity 0.08 0.09 WACC 0.06 0.07 Cash flows Terminal value FCFF ($M) 7,600 5,700 299,250 FCFE ($M) 7,040 7,070 185,588 Discount factors PV factor for FCFF 0.943 0.873 0.873 PV factor for FCFE 0.926 0.842 0.842 Present values Value of firm PV(FCFF) 7, 170 4,979 261,377 273,525 PV(FCFE) 6,519 5,951 156,205 168,674 FCFF = EBIT(1 - to) + Depreciation - Capital expenditures + Change in NWC FCFE=FCFF-Interest expense*(1-T)+Change in long-term debt