A company has determined that its optimal capital structure consists of $40$ percent debt and $60$ percent equity $($Assume External equity$).$ Given the following information, calculate the firm's weighted average cost of capital $($WACC$).$

$r_{d\text{b}\text{e}\text{f}\text{o}\text{r}\text{e}}$Tax$=10\%,$Tax$=40\%,P_0=$$$50,$ Growth $=8\%,D_0=$$$2\mathrm{.}00,$ Flotation cost $=10\%$

re $=12\mathrm{.}8\%$ wacc $=0\mathrm{.}4**10**0\mathrm{.}6+0\mathrm{.}6**12\mathrm{.}8=10\mathrm{.}08\%$

Ch$11.$

EMC Corp's current free cash flow is $$400,000($FCF$0)$ and is expected to grow at a constant rate of $5\%.$ WACC $=12\%.$ Calculate EMC's value of operations.

$6000$

Vop $=$ FCF$1\frac{?}{?}($WACC $-g$

Gere Furniture forecasts a free cash flow of $$40$ million in Year $3,$ i$.$e$.,$ at $t=3,$ and it expects $FCF$ to grow at a constant rate of $5\%$ thereafter. If the weighted average cost of capital is $10\%$ and the cost of equity is $15\%,$ what is the horizon value, in millions at $t=3?$

$$840$