You have been asked to value KARIN, a Electric company and have come up with the following inputs.

1. What is your estimate to the appropriate discount rate during high-growth period?

2. What is your estimate to the appropriate discount rate during stable-growth period?

3. What is your estimate to the terminal Value (TV)?

4. What is your estimate to the total firm value?

5. Suppose KARIN has 200 million outstanding shares and $1.5 billion in debt, what is the value of KARIN's stock based on this information?

. Base Year Information (2020) Earnings before interest and taxes in 2020 =$600 million Capital expenditures in 2020 = $120 million Depreciation in 2020 = $100 million Revenues in 2020 = $6,000 million Working capital as percent of revenues = 20% Tax rate = 40% . . e High-Growth Phase Length of high-growth phase = 5 years Expected growth rate in FCFF=15% Beta 1.30 Cost of debt = 8% (pre-tax) Debt ratio = 30% Risk-free rate = 7% Market Risk Premium (MRP) = 6% e Stable-Growth Phase Expected growth rate in FCFF= 3% Beta = 1.5 Cost of debt =7% (pre-tax) Debt ratio 25% Risk-free rate 7% Market Risk Premium (MRP) = 6%