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Compressed Adjusted Present Value Schwarzentraub Corporation's expected free cash flow for the year is $550,000; in the future, free cash flow is expected to grow

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Compressed Adjusted Present Value Schwarzentraub Corporation's expected free cash flow for the year is $550,000; in the future, free cash flow is expected to grow at a rate of 8%. The company currently has no debt, and its cost of equity is 13%. Its tax rate is 25%. Suppose the firm issues $5 million debt at a rate of 6%. Use the compressed adjusted value approach to answer the following questions. Do not round intermediate calculations. a. Find Vu. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. $ million b. Find VL. Use the APV model that allows for growth. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. million Find rst. Use the APV model that allows for growth. Round your answer to one decimal place. % c. Start with the value of the unlevered firm, Vu from part a. Use the MM model (with taxes but with zero growth) to calculate VL. (Hint: This answer will differ from that in part b due to differences in growth assumptions.) Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. million Start with the value of the unlevered firm, Vu from part a. Use the MM model (with taxes but with zero growth) to calculate rsl. (Hint: This answer will differ from that in part b due to differences in growth assumptions.) Round your answer to one decimal place. %

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