3. (10 points) You are considering purchasing a local McDonald's franchise. After looking at the numbers, you estimate that next year's Free Cash Flow will be approximately $3.5 million. You believe that this cash flow will grow at a rate of 2% in perpetuity. Your cost of capital is 9%. How much are you willing to pay for this McDonald's franchise? Value of McDonald's franchise 4. (30 points). Calculate the pre-tax Cost of Debt, the after tax cost of debt, the cost of equity, the weights to debt and equity and the weighted average cos using the following assumptions (watch the posted YouTube video for help if you need it. Also, note that I gave you the Market Expected return as opposec to the Market Premium. The Market Premium = Market Expected return - risk free rate. Make sure you account for this in your answer)