In year​ 1, AMC will earn ​$2,400 before interest and taxes. The market expects these earnings to grow at a rate of 2.9

[answerhappygod]

In year​ 1, AMC will earn ​$2,400 before interest andtaxes. The market expects these earnings to grow at a rate of 2.9%per year. The firm will make no net investments​ (i.e.,capital expenditures will equal​ depreciation) or changes tonet working capital. Assume that the corporate tax rate equals25​%. Right​ now, the firm has ​$6,000 in​ risk-freedebt. It plans to keep a constant ratio of debt to equityevery​ year, so that on average the debt will also grow by2.9​% per year. Suppose the​ risk-free rate equals 4.8333​%,and the expected return on the market equals 10.633​%. The assetbeta for this industry is 1.12.
a. If AMC were an​ all-equity (unlevered)​ firm, whatwould its market value​ be?
b. Assuming the debt is fairly​ priced, what is the amountof interest AMC will pay next​ year? If​ AMC's debt isexpected to grow by
2.9​%
per​ year, at what rate are its interest payments expectedto​ grow?
c. Even though​ AMC's debt is riskless​ (the firm willnot​ default), the future growth of​ AMC's debtis​ uncertain, so the exact amount of the future interestpayments is risky. Assuming the future interest payments have thesame beta as​ AMC's assets, what is the present valueof​ AMC's interest tax​ shield?
d. Using the APV​ method, what is​ AMC's totalmarket​ value,
VL​?
What is the market value of​ AMC's equity?
e. What is​ AMC's WACC?
​(Hint​:
Work backward from the FCF and
VL​.)
f. Using the​ WACC, what is the expected return forAMC​ equity?
g. Show that the following holds for​ AMC:
βA=ED+EβE+DD+EβD.
                                                    
h. Assuming that the proceeds from any increases in debt arepaid out to equity​ holders, what cash flows do the equityholders expect to receive in one​ year? At what rate are thosecash flows expected to​ grow?