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please help! Please read the question before answering. I will upvote for clear step by...

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Finance

please help! Please read the question before answering. I will upvote for clear step by step calculations..

Kolmongen Corporation, a diversified technology company, reported sales of $194.9 million in 1992, and had a net loss of $1.9 million in that year. Its net income had traced a fairly Volatile Course over the previous five years:

Year Net Income
1987 $ 0.30 million
1988 $ 11.50 million
1989 $ (2.40) million
1990 $ 7.20 million
1991 $ (4.60) million

The stock had a beta of 1.20, and the normalized net income was expected to increase 6% a year until 1996, after which the growth rate was expected to stabilize 5% a year (the beta will drop to 1.00). The depreciation amounted to $8 Million in 1992, and capital spending amounted to $10 million in that year. Both items were expected to grow 5% a year in the long term. The firm expected to maintain a debt ratio of 35%. (The Treasury bond rate was 7%, and the risk premium is 5.5%.)

A. Assuming that the average earnings from 1987 to 1992 represents the normalized earnings, estimate the normalized earnings and free cash flow to equity.

b. Estimate the value per share.

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