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You are evaluating building a luxury vacation rental property on Lake Norman as an investment project for your company, Seize Your Dream, Inc. You estimate

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You are evaluating building a luxury vacation rental property on Lake Norman as an investment project for your company, Seize Your Dream, Inc. You estimate $1,350,000 in upfront construction costs including the cost of the land, and net rental free cashflow of $8,359 annually, for 10 years, after subtracting annual property taxes and maintenance expenses. Based on your analysis of property values in the area, you expect to sell the property at the end of the 10th year for $ 1,907,023. You plan to sell equity shares and issue 10 year bonds to finance the $1,350,000 construction cost of the project. You will maintain your current capital structure of 72% debt and 28% equity. Your company's existing 10 year 6.50% coupon quarterly coupon bonds trade at $914. Your existing stock is quoted at $67.39 per share. You paid a dividend of $1.75 per share last year and expect to maintain an annual growth rate of 12%. Your company's beta is 2.93, the marginal tax rate is 23%, the risk free rate is .75% and the risk premium is 6,2%. What is your expected FCF in year 3? Enter your answer to 2 decimal places, with no $. If your answer is negative, indicate with a "." Ex:-XX.XXX.XX You are evaluating building a luxury vacation rental property on Lake Norman as an investment project for your company, Seize Your Dream, Inc. You estimate $1,350,000 in upfront construction costs including the cost of the land, and net rental free cashflow of $8,359 annually, for 10 years, after subtracting annual property taxes and maintenance expenses. Based on your analysis of property values in the area, you expect to sell the property at the end of the 10th year for $ 1,907,023. You plan to sell equity shares and issue 10 year bonds to finance the $1,350,000 construction cost of the project. You will maintain your current capital structure of 72% debt and 28% equity. Your company's existing 10 year 6.50% coupon quarterly coupon bonds trade at $914. Your existing stock is quoted at $67.39 per share. You paid a dividend of $1.75 per share last year and expect to maintain an annual growth rate of 12%. Your company's beta is 2.93, the marginal tax rate is 23%, the risk free rate is .75% and the risk premium is 6,2%. What is your expected FCF in year 3? Enter your answer to 2 decimal places, with no $. If your answer is negative, indicate with a "." Ex:-XX.XXX.XX

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