In the Table Below Is Selected Information for Sprigue Company

In the table below is selected information for Sprigue Company.

All figures are in thousands and represent expectations of the future. $$\begin{array} { l r l r r r } \text { Year } & 2005 & 2006 & 2007 & 2008 & 2009 \\\text { Net income } & \$ 5,175 & \$ 6,210 & \$ 7,462 & \$ 8,570 & \$ 8,998 \\\text { Dividends } & 773 & 932 & 1,118 & 1,285 & 2,250 \\\text { Depreciation } & 621 & 702 & 793 & 896 & 1,013 \\\text { Increase in working capital } & 675 & 1,035 & 1,242 & 1,118 & 428 \\\text { Capital expenditures } & 5,625 & 8,625 & 10,350 & 9,315 & 3,571 \\\text { New debt issued } & 900 & 4,500 & 5,500 & 3,900 & 0 \\\text { Old debt retired } & 987 & 750 & 990 & 2,000 & 2,000 \\\text { New equity issued } & 1,823 & 0 & 0 & 0 & 0\end{array}$$
a. Calculate the expected free cash flow to equity for the years 2005 to 2009.
b. Explain the expected changes in debt levels over the five years.

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