1.

Lauryns asset beta is 1.18. Calculate the appropriate FCF discount rate assuming a risk-free rate of 2 percent and a market risk premium of 11 percent. (Enter your answer as a percent rounded to 1 decimal place. Omit the "%" sign in your response.)

Discount rate

%

2. You are going to value Lauryns Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.4, a debt-to-equity ratio of .5, and a tax rate of 30 percent. Assume a risk-free rate of 4 percent and a market risk premium of 9 percent. Lauryns Doll Co. had EBIT last year of $42 million, which is net of a depreciation expense of $4.2 million. In addition, Lauryn made $6 million in capital expenditures and increased net working capital by $1.0 million. Assume her FCF is expected to grow at a rate of 3 percent into perpetuity. What is the value of the firm? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. Omit the "$" sign in your response.)

Firm value

$ million

3. You are going to value Lauryns Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.5, a debt-to-equity ratio of .3, and a tax rate of 40 percent. Based on this information, what is Lauryns asset beta? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Lauryns asset beta