You have also been provided with the following additional information.

$$ Analysts expects the firm$$s revenues and Operating Income to grow at $8\%$ a year from $2024$ to $2026.$

$$ Capital expenditures, Depreciation and Net working Capital are expected to grow at $4\%$ a year from $2024$ to $2026.$

$$ Beginning in $2027(2026-2027$ fiscal year$),$ the company is expected to have a stable growth rate of $3\%.$

$$ Depreciation expense for $2023$ is $$703$ million. The company is expected to maintain it's $2023$ effective tax rate into the future.

$$ Capital spending is expected to offset depreciation in the stable state period.

$$ The yield on $10-$year treasury bonds is $4\mathrm{.}49\%$ and the equity market risk premium $($medium term$)$ is $4\mathrm{.}2\%.$ Yield on $90-$Days Treasury Bills is $5\mathrm{.}45\%.$

$$ The company has $439,600,000$ shares outstanding. The stock price is currently trading at $$305$ per share. The company$$s stock has a Beta of $0\mathrm{.}76.$

$$ The average price of the company$$s long$-$term corporate Bonds was $98\mathrm{.}59$ with an average time to maturity of $10$ years. The company$$s long$-$term bonds have a bond rating of A$+.$ The default spread on A$+$ rated bonds is currently $1\mathrm{.}3\%.$

a$.$ What discount rate should be used to value the company$$s cash$-$flows? $(25$ points$).$