Using a corportate valuation model answer the following:

ABC had free cash flow (FCF) of $24,000,000 in the most recent year. Analysts for the firm expect FCF to grow 25% next year, 15% in year 2, 12% in year 3, and at constant rate of 10% from year 4 onward. ABC has $50 million in short-term securities, $200 million in long-term securities, $1.2 billion in long-term debt, $300 million in short-term debt, $100 million in preferred stock (1 million shares), 25 million shares of common stock, and a cost of capital (wacc) of 11%.

a) Find the FCF for years 1-4

b) Find the terminal value

c) What stage of the industry lifecycle would this company be in and why?

In the stable growth period, ABC is expected to grow at 10% per year. Assume that in stable growth ABC will need to reinvest 83 1/3% of its after-tax operating profit or NOPAT.  

d) Compute the ROIC ABC expects in its stable growth period. What does this tell you about ABC competitive advantage in the stable growth period?