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(1)Company XYZ is expecting Free Cash Flows over the next five years as follow: The company also expects that, after the fifth year, the Free
(1)Company XYZ is expecting Free Cash Flows over the next five years as follow: The company also expects that, after the fifth year, the Free Cash Flows will grow at a constant rate of 5% per year. The firm's target is to be financed by 50% equity and 50% debt. The cost of equity and the cost of debt are estimated to be 20% and 12% respectively. The tax rate is 20%. The company has cash of $39 million, debt of $2,015 million, and 500 million shares outstanding. What is the company's expected current share price? (20 marks)
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