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Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and retention

Assume that you have been asked to place a value on the ownership position in Briarwood Hospital. Its projected profit and loss statements and retention requirements are shown below in millions. Briarwood's cost of equity is 16 percent, its cost of debt is 10 percent, and its optimal capital structure is 40 percent debt and 60 percent equity. The best estimate for Briarwood's long-term growth rate is 4 percent. Furthermore, the hospital currently has $80 million in debt outstanding. 1A. Suppose you decide to use the free operating cash flow (FOCF) method to find the equity value of the hospital. What is the FOCF in year 1?1B. Continuing with the previous question, what is the FOCF in year 2?1C. Continuing with the previous questions, what is Briarwood's corporate cost of capital (CCC).2. Continuing with the previous questions, what is Briarwood's terminal value (at date 5)? Note: you will need the find the FOCFs from Years 3,4 and 5 to answer this question. 3. Continuing with the previous questions, what is the equity value of Briarwood using the FOCF method? 4. ollowing from the previous questions, suppose now you decide to use the free cash flow to equityholders (FCFE) method to find the equity value of the hospital. What is the FCFE in year 1?
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