1. A company has an EBITDA of $300 million today which is expected to grow by 12% per year for the next three years. If we assume for a terminal value in year 3 a multiple of 8 (times EBITDA) and outstanding debt of $1.372 billion - how much per share would shareholders receive if there were 40 million shares outstanding? a. $50 b. $45 . $66 d. $84
2. Based upon a company's capital structure and estimated equity and (after tax) debt costs, you determine their WACC is approximately 9.6%. Note the company's cost of equity exceeds its before tax cost of debt. If you increased the proportion of debt in the capital structure (and therefore less equity) with no meaningful change in either required equity or debt costs, you would expect the WACC to

1. Decrease
2. Increase modestly
3. Remain unchanged
4. Increase sharply