Assume all future cash flows (FCFF, FCFE, and Dividends) will grow at a constant sustainable growth rate (gur=ROE*b) in perpetuity. Use the following information in the table below to help answer problems 8-10: Cost of Debt 12.5% Cost Equity 22.5% Tax Rate 35.0% all figures below in millions Shares Outstanding 35.0 FCFF (T-0) $ 600 FCFE (T-0) $ 560 Net Incorre $ 100 Dividends $ 60 Total Assets $ 1,200 Total Debt $ 800 10. Ignore your answer to question 8 and assume the long term sustainable growth rate is 7.5%. A private equity group who wants to purchase all of the company's assets would be willing to pay approximately __. Do not use a DDM. Use a perpetuity formula with either FCFF or FCFE, whichever is appropriate. a. $6,318M b. $7,740M C. $11,077M d. $11,908M e. $22,114M 11. Regarding a company's capital structure, which of the following theories (1-111) imply capital structure is irrelevant in determining firm value: I. II. III. Modigliani & Miller Proposition I (MMI) Modigliani & Miller Proposition II (MMII) Static Theory a. b. II d. II, III e. None of the above 12. Regarding a company's capital structure, which of the following theories (I-III) imply the higher the firm's debt level, the higher the risk of bankruptcy: I. II. III. Modigliani & Miller Proposition 1 (MMI) Modigliani & Miller Proposition II (MMII) Static Theory b. 6. lL d. II, III e. All of the above