You are trying to estimate the free-cash flow to equity for KLP REIT. KLP REIT is an apartment REIT that reported net income of $400 million last year. The REIT has a cost of equity capital of 10% and expects earnings to grow 4% per year over the next 5 years and then by 2% per year in perpetuity thereafter. Assume that capital spending and depreciation will grow at the same rate as earnings and there are no working capital requirements or debt.

a.) What is the free-cash flow to equity for the REIT last year? Assume depreciation was $50 million and capital expenditures were $40 million.