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  3. 4. use the following information to calculate the.

4. Use the following information to calculate the...

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Accounting

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4. Use the following information to calculate the FV of Corp ABC using FCFE and FCFF. Corp ABC, 31 Dec 2022, in \$ Corp ABC, Income Statement, 2023, in \$ - RFR =7.5% - Correlation coefficient (Corp ABC, Market) =0.50 - Standard deviation of returns, Corp ABC=20% - Standard deviation of returns, Market Portfolio =10.0% - Expected return on the market portfolio =12.5% - Annual CAPEX =50% of net income - Payout ratio is based on the residual income model A. Calculate g based on the information above. B. Calculate FCFE and FCFF in 2023. (Hint: Include the tax shield in EBIT). C. If all the items of the income statement are to grow at the rate of g to infinity given the prevailing interest rate, prepare the income statement and the balance sheet of 2024 then recalculate FCFE and FCFF in 2023. D. Calculate the FV of equity, FV of debt and FV of the firm as of end 2022. Show that FV of the firm must be equal to FV of debt plus FV of equity if your assumptions are consistent

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