Question: Instructions Please find attached an Excel spreadsheet with forecasts for Kandy Kanes, Co. Five years of earnings, depreciation, and capital expenditures have been estimated by

Instructions Please find attached an Excel spreadsheet with forecasts for Kandy Kanes, Co. Five years of earnings, depreciation, and capital expenditures have been

Instructions Please find attached an Excel spreadsheet with forecasts for Kandy Kanes, Co. Five years of earnings, depreciation, and capital expenditures have been estimated by your equity analyst, and you believe that after the fifth year, free cash flow will grow by 4.5% per year. The market value of debt is $2,500,000 and the firm has $150,000 in marketable securities. There are 750,000 shares outstanding, the tax rate is 25%, and the discount rate (WACC) is 9%. Please do the following: 1. Calculate free cash flow for the next five years 2. Calculate free cash flow for the sixth year assuming a 4.5% growth rate 3. Estimate the value of a share of Kandy Kanes' stock. A B C D E F G 2025 2021 38,592 483,195 39,820 2022 37,502 293,602 29,348 2023 28,957 936,823 29,838 2024 39,572 283,957 27,562 1 Kandy Kanes Co. 2 Free Cash Flow Forecast 3 2020 4 Depreciation 83,492 5 EBIT 493,294 6 Investment in Operating Assets 93,028 7 8 9 10 11 12 13 14 15 16

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