Answer all questions and show necessary work. Please be brief. This is an open books, open notes exam. 1. You have been asked to value Dexia Financials, a small, high growth bank, and are told that Dexia generated $150 million in net income in the most recent year on a book value of equity of $ 750 million; you can assume that the book value of equity is equal to the regulatory capital of the bank and that it has risk-adjusted assets of $ 5 billion right now. a. Dexia expects its risk adjusted assets and net income to grow 10% a year for the next ve years and plans to increase its regulatory capital ratio to 20% of risk-adjusted assets by the end of year 5 (with the ratio changing in equal annual increments over the ve years). Estimate the FCFE of Dexia each year for the next 5 years. (2 points)