Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

8 20 points Compressed Adjusted Present Value FCF = free cash flow FCF 8 growth rate $ 510.000,00 8,00% su cost of unlevered equity Tax

image text in transcribed
image text in transcribed
8 20 points Compressed Adjusted Present Value FCF = free cash flow FCF 8 growth rate $ 510.000,00 8,00% su cost of unlevered equity Tax rate 12,00% 35,00% Biocentrics Inc.'s expected free cash flow and its future free cash flow growth rate is listed to the right. Biocentrics currently has no debt, and its cost of unlevered equity.rs and tax rate is stated to the right. Use the compressed adjusted value approach to answer the following questions a. Find Vu (s points) b. Find V and reif Biocentrics uses the debt amount and its cost listed to the right. (5 points) Use the APV model that allows for growth. Debt amount ro cost of debt $6.000.000,00 6,00% c. Based on Vu from Part a, find and r using the MM model (with taxes) it Blocentrics uses the amount of debt and cost of debt from part b. (5 points) d. Explain the difference between your answers to Parts b and c. (5 points) Please show work and answer questions completely to receive full credit 28 29 30 a Vu 31 32b VL 93 TSL 34 35C VL using MM rs using MM 36 37 The difference betweeen the answers to parts b and c are as follows: 38 d 39 20 21 42 13 8 20 points Compressed Adjusted Present Value FCF = free cash flow FCF 8 growth rate $ 510.000,00 8,00% su cost of unlevered equity Tax rate 12,00% 35,00% Biocentrics Inc.'s expected free cash flow and its future free cash flow growth rate is listed to the right. Biocentrics currently has no debt, and its cost of unlevered equity.rs and tax rate is stated to the right. Use the compressed adjusted value approach to answer the following questions a. Find Vu (s points) b. Find V and reif Biocentrics uses the debt amount and its cost listed to the right. (5 points) Use the APV model that allows for growth. Debt amount ro cost of debt $6.000.000,00 6,00% c. Based on Vu from Part a, find and r using the MM model (with taxes) it Blocentrics uses the amount of debt and cost of debt from part b. (5 points) d. Explain the difference between your answers to Parts b and c. (5 points) Please show work and answer questions completely to receive full credit 28 29 30 a Vu 31 32b VL 93 TSL 34 35C VL using MM rs using MM 36 37 The difference betweeen the answers to parts b and c are as follows: 38 d 39 20 21 42 13

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes

11th edition

9781259278617, 77861647, 1259278611, 978-0077861643

More Books

Students also viewed these Finance questions

Question

Explain in detail the different methods of performance appraisal .

Answered: 1 week ago