Please complete the Problem below and upload your answers in a excel document. Please make sure to show your work $($Helpful Hint, please refer to Chapter $15).$

The venture investors and founders of the XYZ Services venture, a closely held corporation, are contemplating merging the successful venture into a much larger diversified firm that operates in the same industry. This year, XYZ had a free cash flow available to the enterprise of $$4,000,000.$ Since the venture is now in its maturity stage, XYZ$\text{'}$s free cash flows are expected to continue to grow at a $5$ percent annual compound growth rate in the future. The weighted average cost of capital $($WACC$)$ for the venture is estimated at $15$ percent. Interestbearing debt owed by $xYZ$ is $$15$ million. In addition, the venture also has surplus cash of $$3$ million. $xYZ$ currently has $10$ million shares outstanding with $7$ million held by venture investors and $3$ million held by founders. The venture investors have an average investment of $$1\mathrm{.}0$ per share while the founders' average investment is $$0\mathrm{.}25$ per share.

A$.$ Based on the above information, estimate the enterprise value and equity value of XYZ Services.

B$.$ How much of the value of XYZ would belong to the venture investors versus the founders. How much would the venture be worth on a per share basis?

C$.$ What would be the percentage appreciation on the stock bought by the venture investors versus the investment appreciation for the founders? Who had a higher appreciation? Does it make sense?

D$.$ If the founders have held their investments for five years, calculate their compound annual or internal rate of return on their investments.

E$.$ The venture investors made a first$-$round investment of $3\mathrm{.}5$ million shares at $$0\mathrm{.}75$ per share four years ago. What was the compound annual rate of return on the first$-$round investment?

F$.$ Venture investors made a second$-$round investment of $3\mathrm{.}5$ million shares at $$1\mathrm{.}25$ per share three years ago. Calculate their compound rate of return on this investment.

G$.$ Compare the rate of return of answers D$,$ E$,$ F$.$ What are your conclusions?