Please could you explain fully how you where you have used each of the numbers? Im a bit stuck with this topic.

The Honest company has 2.6 million shares outstanding.

Year 0 1 2 3 4 5

Sales and investments forecast ( millions):

Sales 110 125 122 130 163 177

Gross fixed assets 99 107 110 138 150 168

Depreciation 14.6 15 16.6 18.2 17.5

Respectively, the cost of goods sold, other costs and net working capital requirement are 72%, 17% and 9% of sales. Profits are taxed at 34%.

i. Estimate the free cash flows of the Honest company for the next five years.

ii. Suppose that Honest company only uses debt and equity as the capital, its target debt-to value ratio is 1/3. The companys equity has a beta of 1.2. The annual risk-free rate is 3.6% and the annual market expected return is 12.3%. The cost of debt of the company is 6%.

What is the weighted average cost of capital of the Honest company?

iii. Suppose the Honest companys free cash flows are expected to grow at a 5.5% rate beyond year 5, what is the value of the Honest company?