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Bon Temps embarked on an a decided to finance the expansion by borrowing $40 million and by halting dividend payments to increase retained earnings. Its

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Bon Temps embarked on an a decided to finance the expansion by borrowing $40 million and by halting dividend payments to increase retained earnings. Its WACC is now 10%, and the projected free cash flows for the next three years are -$5 million, $10 million, and $20 million. After Year 3, free cash flow is projected to grow at a constant 6% What is Bon Temps's total value? If it has 10 million shares of stock and $40 million of debt and preferred stock combined, what is the price per share? k. Suppose Bon Temps decided to issue preferred stock that would pay an annual dividend of $5.00 and that the issue price was $50.00 per share. What would be the stock's expected return? Would the expected rate of return be the same if the preferred was a perpetual issue or if it had a 20-year maturity

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