Question
Cagiati enterprise has a FCFF of $1.7 billion and a FCFE of $1.3 billion. The WACC of Cagiati enterprises is 11% and its before-tax cost
Cagiati enterprise has a FCFF of $1.7 billion and a FCFE of $1.3 billion. The WACC of Cagiati enterprises is 11% and its before-tax cost of debt is 5.7% and its required return for equity is 13%. The tax rate is 33.33% and its FCFF is expected to grow forever at 7% and FCFE is expected to grow forever at 7.5%. Cagiati has debt outstanding of $15 billion.
a. What is the firm value for Cagiati enterprises?
b. What is the value of equity for Cagiati enterprise?
This is a practice you know what question please dont flag me im trying to learn how to complete this problem
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