10. Consider the following data: (Note: FCF = Free Cash Flow) FCF1 = 7 million; FCF2 = 45 million; FCF3 = 55 million. Assume that free cash flow grows at a rate of 4 percent for year 4 and beyond. If the weighted average cost of capital is 10 percent, what is the value of the firm? a. 953.33 million b. 801.12 million c. 716.25 million d. 736.02 million 8. The following data on a merger are given: Firm AB Price per share Shares outstanding Total value Firm A 100 100 10,000 Firm B 10 40 400 11,000 Firm A has proposed to acquire Firm B at a price of 20 per share for Firm B's stock. Calculate the NPV of the merger. a. 200 b. 400 c. 600 d. 150 9. Which of the following actions by an acquiring firm signals its belief that post- merger gains will be substantially larger than expected? a. The acquiring firm makes a stock offer, since its stock value is priced lower than it will be postmerger. b. The acquiring firm makes a cash offer, since this allows the acquirer to solely benefit from gains not yet reflected in the market. c. The acquiring firm attempts to gain majority ownership, but not complete ownership. d. The acquiring firm makes an offer with the condition that management must be replaced