Rio is a company specialized in producing healthcare products. Its free cash flows in millions are expected to be as follow: Year 1 3.5 Year 2 3.2 Year 2 3.4 Year 4 5.9 Year 5 6.1 Year 6 6.0 Cash flows will settle down starting year 6 and will record a growth of 3% per year. Assume a WACC of 9%. 1. Compute the horizon value at year 6? 2. Compute the present value of the company? 2. If the market value of debt is $36 million, compute the total value of equity?

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