Question (for you to answer): Headache Inc. depends on two sources of financing: bond issues and common stock. In the following table, you can see the market value of these two sources as well as required rates of return: Bonds Common stock Total Other financial information: Net income available to common shareholders Interest expenses Depreciation Investment in fixed capital Investment in working capital Net borrowing Tax rate Stable growth rate of FCFF Stable growth rate of FCFE Market Value Required Return $480,000,000 8.00% $720,000,000 $1,200,000,000 12.00% $105,600,000 $60,000,000 $38,400,000 $67,200,000 $19,200,000 $24,000,000 30% 2% 2.5% 1) Using FCFF, what is the present value of the firm, and the present value of the equity? 2) Using FCFE, what is the present value of the equity?