Question 3You are an investment analyst that has been requested to assess the Free Cash Flowto The Firm (FCFF) and the Free Cash Flow to Equity (FCFE) in the recently completedfinancial year ended 30 June 2019 in a firm under review. You have been providedwith the data in the table below.$ MillionsEBITDA162.1Depreciation38.2Net Interest Expense14Fixed Capital Expenditure less disposal proceeds41Increase in Net Operating Working Capital3New issues of bonds26.3Bonds redeemed19.3Issues of new Ordinary Shares35.1Ordinary Share Buy-backs20.2Stock dividends issued6.8Ordinary Share cash dividends declared17.3New issues of Equity Preference Shares3.8Equity Preference Share redemptions3.5Equity Preference Share cash dividends declared (when theyare paid, they will not be tax deductible to the firm)0.2Effective Company Tax Rate30%Tasks: Calculate for the financial year ended 30 June 20191. FCFF = EBITDA (1-Tc) + Depn (Tc) – FCinv – WCinv2. FCFF = NI + Depn – WCinv – FCinv + Int (1-Tc)3. FCFE = FCFF + Net Borrowings – Net Interest expense (1-Tc) – PrefShare Divs4. FCFE = Earnings Avail to ordinary shareholders + Depn – WCinv -FCinv + Net Borrowings5. Dividend payout Ratio6. Retention Ratio