The table below contains some information about the Black Hills Air Co. Using the information answer the following questions. Please show all your work great detail! (32 points)

Black Hills Air Co. 2019 and 2020 Balance Sheet ($ in millions)
Year			Year
	2019	2020		2019	2020
Assets			Liabilities
Cash	84	98	Accounts payable	312	344
Accounts receivable	165	188	Notes payable	231	204
Inventory	393	422	Long-term debt	531	457
Total current assets	642	708	Total debt	1,074	1,005
Net plant and equipment	2,731	2,922
			Owners Equity
			Common stock	500	510
			Retained earnings	1,799	2,115
			Total equity	2,299	2,625
Total assets	3,373	3,630	Total liability & equity	3,373	3,630

Black Hills Air Co. 2020 Income Statement ($ in millions)
Sales	2,361
Cost of goods sold	1,344
Depreciation	276
Earnings before interest and taxes (EBIT)	741
Interest paid	141
Taxable income	600
Taxes (21%)	126
Net income	474
Dividends	158
Addition to retained earnings	316

Other information
Risk-free rate of return (T-bill)	3%
Market portfolio return (S&P 500)	12%
BHACs stock beta ()	1.2
Number of shares outstanding	33 millions
Annual growth rate of free cash flow (FCF)	8.39%

a. What are the sustainable growth rate? (3 points)

b. What are the required return for BHAC? (3 points)

c. According to the constant dividend growth model, what is your estimation for the current share price of BHAC? (3 points)

d. Assume the sustainable growth rate and required return you calculated are valid. Use the clean surplus relationship to calculate the share price for BHAC with the residual income model (RIM). (8 points)

e. Now, you are going to value BHAC using the FCF model. (15 points)

1) What is the asset beta of BHACs (_Asset)? (3 points)

2) What is the appropriate discount rate (r)? (3 points)

3) What is BHACs free cash flow in 2020? (5 points)

4) Estimate the BHACs share price using the FCF model. (4 points)