Following information is given in respect of Alpha Ltd., which is expected to grow at a rate of 20% p.a. for the next three years, after which the…

Following information is given in respect of Alpha Ltd., which is expected to grow at a rate of 20% p.a. for the next three years, after which the growth rate will stabilize at 8% p.a. normal level, in perpetuity. For the year ended March 31, 2023 Revenues 15,000 Crores Cost of Goods Sold (COGS) 6,000 Crores Operating Expenses 4,500 Crores Capital Expenditure 1,500 Crores Depreciation (included in Operating Expenses) 1,200 Crores During high growth period, Revenues & Earnings before Interest & Tax (EBIT) will grow at 20% p.a. and capital expenditure net of depreciation will grow at 15% p.a. From year 4 onwards, i.e. normal growth period revenues and EBIT will grow at 8% p.a. and incremental capital expenditure will be offset by the depreciation. During both high growth & normal growth period, net working capital requirement will be 25% of revenues. Out of total capital, 60% constitute Equity and rest is Debt. The cost of equity is 17.53% and pre-tax cost of debt is 16%. Corporate Income Tax rate is 30%. Required: Estimate the value of Alpha Ltd. using Free Cash Flows to the Firm (FCFF). The PVIF @ 15% for the three years are as below: Year t1 t2 t3 PVIF 0.8696 0.7561 0.6575 Note: Carry out calculation in Crore and round off figures upto two decimal points.