25. If a firm's capital structure is unstable, the over the a. FCFE (Free Cash Flow to Equityholders); FCFF (Free Cash Flow to the Firm) b. FCFF (Free Cash Flow to the Firm); FCFE (Free Cash Flow to Equityholders) 26. Dividends and stock repurchases in a given year generally. cash flows to the firm (FCFF) for the same year. a. decrease approach to valuation Is favored approach. the free b. have no effect on c. increase 27. Sprockets, Inc. just paid a dividend of $1.20 per share. The dividend is expected to grow at a rate of 9% for the next two years, 6% for 3 years, and 3% thereafter. If the cost of equity is estimated at 8%, what is the value of the stock today? If you purchased the stock today and held on to it for one year, what is your expected return? 28. The free cash flows to the firm (FCFF) for a company for the past year was $60 million. Assume that the company has no non-operating assets, $120 million in debt, a weighted average cost of capital of 9%, and a constant growth rate of 3% for its free cash flows, what is the estimated value of the firm today? What is the estimated value of the firm's equity? nhun of a call option that has a strike price of $40 and the price of the