Assume all future cash flows (FCFF, FCFE, and Dividends) will grow at a constant sustainable growth rate (gu=ROE*b) in perpetuity. Use the following information in the table below to help answer problems 8-10: Cost of Debt Cost Equity 12.5% 22.5% Tax Rate 35.0% all figures below in millions Shares Outstanding 35.0 FCFF (T=0) $ 600 FCFE (T=0) $ Net Income $ 560 100 Dividends $ 60 Total Assets$ 1,200 Total Debt $ 800 What is the sustainable long term growth rate? 8. a. 5.0% b. 8.0% 10.0% C. d. 20.0% e. 25.0% Ignore your answer to question 8 and assume the long term sustainable growth rate is 7.5%. An activist investor who wants to purchase all the company's shares would be willing to pay approximately whichever is appropriate. 9. Do not use a DDM. Use a perpetuity formula with either FCFF or FCFE, a. $107 per share b. $114 per share c. $115 per share d. $123 per share e. $344 per share