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5. (5) Assume you have collected the following data ($ in millions): Be rm rf 1.20 Ta = 3.20% t = 25% Revenue=$4,200 Costs=$1,000 Depreciation=$840

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5. (5) Assume you have collected the following data ($ in millions): Be rm rf 1.20 Ta = 3.20% t = 25% Revenue=$4,200 Costs=$1,000 Depreciation=$840 Capital Expenditure=$960 Change in working capital=$680 Assume free cash flow to the firm (FCFF) is a level perpetuity. Using the adjusted present value method (APV) to compute the unlevered value of the firm. Use debt-to-firm value ratio 20% (i.e. debt-to-equity ratio 25%). Assume contingent borrowing, compute the levered firm value. 5. (5) Assume you have collected the following data ($ in millions): Be rm rf 1.20 Ta = 3.20% t = 25% Revenue=$4,200 Costs=$1,000 Depreciation=$840 Capital Expenditure=$960 Change in working capital=$680 Assume free cash flow to the firm (FCFF) is a level perpetuity. Using the adjusted present value method (APV) to compute the unlevered value of the firm. Use debt-to-firm value ratio 20% (i.e. debt-to-equity ratio 25%). Assume contingent borrowing, compute the levered firm value

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