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You are valuing a company at year end 2022 that has a target capital structure of 55% equity and 45% debt. The estimated cost of equity is 14.0% and cost of debt (excluding tax effect) is 5.0%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is £ 2023 2024 2025 O a. FCF £ 111421 2022 8000 7400 2026 The expected nominal growth rate of FCF in perpetuity is 1.15%. The corporate tax rate is 25%. The estimated enterprise value is: 8200 8900 9200

You are valuing a company at year end 2022 that has a target capital structure of 55% equity and 45% debt. The estimated cost of equity is 14.0% and cost of debt (excluding tax effect) is 5.0%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is £ 2023 2024 2025 O a. FCF £ 111421 2022 8000 7400 2026 The expected nominal growth rate of FCF in perpetuity is 1.15%. The corporate tax rate is 25%. The estimated enterprise value is: 8200 8900 9200

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You are valuing a company at year end 2022 that has a target capital structure of 55% equity and 45% debt. The estimated cost of equity is 14.0% and cost of debt (excluding tax effect) is 5.0%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is £ 2023 2024 O a. Ob. O C. £ 111421 £ 105745 FCF £ 101793 2022 The expected nominal growth rate of FCF in perpetuity is 1.15%. The corporate tax rate is 25%. The estimated enterprise value is: 8000 2025 7400 8200 8900 2026 9200
Transcribed Image Text:You are valuing a company at year end 2022 that has a target capital structure of 55% equity and 45% debt. The estimated cost of equity is 14.0% and cost of debt (excluding tax effect) is 5.0%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is £ 2023 2024 O a. Ob. O C. £ 111421 £ 105745 FCF £ 101793 2022 The expected nominal growth rate of FCF in perpetuity is 1.15%. The corporate tax rate is 25%. The estimated enterprise value is: 8000 2025 7400 8200 8900 2026 9200
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