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A company has the following characteristics Cost of equity: 1 4 % Cost of debt ( before tax ) : 1 0 % Debt to
A company has the following characteristics
Cost of equity:
Cost of debt before tax:
Debt to Equity ratio:
Tax rate:
Its most recent operating profit EBIT was $ million and is expected to grow at per
year for the mediumterm.
It also had the following relevant items for the most recent results and its mediumterm
growth rates.
Depreciation was $ and is expected to grow at per year.
Increase in net working capital NWC was $ and is expected to grow at
per year.
Capital Expenditures CAPEX was $ and is expected to grow at per year.
After years, the Adjusted Cash Flows From Assets are expected to grow at a constant rate
of stretching until infinity.
Derive the WACC of the firm
Create a table of the Adjusted Cash Flows From Assets CFFA for the first years
Derive the value of the overall firm
Break down the value of the overall firm into debt and equity value
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