At the end of 2009, you forecast the following cash flows (in millions) for a firm with net debt of $759 million;

You forecast that free cash flow will grow at a rate of 4% per year after 2012. Use a required return of 10% in answering the following questions.
a. Calculate the firm's enterprise value at the end of 2009.
b. Calculate the value of the equity at the end of2009.

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2010 2011 2012 Cash flow from operations $1,450 $1,576 $1,718 1,200 Cash investment 1,020 1,124