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Can someone answer these four questions in the NEXT 15 MINUTES. 17. Please consider the following information for the next 4 questions (Q17 - Q20).
Can someone answer these four questions in the NEXT 15 MINUTES.
17. Please consider the following information for the next 4 questions (Q17 - Q20). TAMU Inc. is for sale and there is a price tag of $225,000. Your company, ABC, who is considering the purchase, has a beta of 1.5, the market is expected to have a 20% return and the riskfree rate is 5%. The forecasted free cash flows for the next 4 years for TAMU are 7000 (FCF1), 22000(FCF2), 0(FCF3), and 50000 (FCF4). The company is expected to grow at 4% indefinitely after that. Your company has a debt/equity ratio of 2/3 and the applicable tax rate is 35%. ABC's cost of debt (before taxes) is 8%. What is the cost of equity for ABC company? (Points : 5) 35% 30% 27.5% 22.5% Question 18. Continuing with the information from Q17, what is ABC's WACC? (Points : 5) 18.58% 19.70% 21.41% 15.88% Question 19. Continuing with the information from Q17, what is the terminal value for TAMUC Inc. after the 4th year (TV4)? (Points : 5) 342,935.53 254,769.21 269,106.57 356,652.95 Question 20. Continuing with the information from Q17, what is the NPV of purchasing TAMU Inc.? (Points : 5) positive 2,220.43 negative 2,220.43 positive 178,490.54 negative 178,490.54 17. answer 22.5% 18. answer 21.41% 19answer 342,935.53 20. answer negative 2,220.43Step by Step Solution
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