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Compressed Adjusted Present Value Schwarzentraub Corporations' expected free cash flow for the year is $700,000; in the future, free cash flow is expected to grow
Compressed Adjusted Present Value Schwarzentraub Corporations' expected free cash flow for the year is $700,000; in the future, free cash flow is expected to grow at a rate of 9%. The company currently has no debt, and its cost of equity is 13%. Its tax rate is 40%. Use the compressed adjusted value approach to answer the following questions. Do not round intermediate calculations. a. Find Vu. Enter your answers 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 if Schwarzentraub uses $6 million in debt with a cost of 9%. Use the APV model that allows for growth. Enter your answers 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 rsl if Schwarzentraub uses $6 million in debt with a cost of 9%. Use the APV model that allows for growth. Round your answer to one decimal place. C. Based on Vu from Part a, find VL using the MM model (with taxes) if Schwarzentraub uses $6 million in 9% debt. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. million Based on Vu from Part a, find rs using the MM model (with taxes) if Schwarzentraub uses $6 million in 9% debt. Round your answer to one decimal place. Compressed Adjusted Present Value Schwarzentraub Corporations' expected free cash flow for the year is $700,000; in the future, free cash flow is expected to grow at a rate of 9%. The company currently has no debt, and its cost of equity is 13%. Its tax rate is 40%. Use the compressed adjusted value approach to answer the following questions. Do not round intermediate calculations. a. Find Vu. Enter your answers 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 if Schwarzentraub uses $6 million in debt with a cost of 9%. Use the APV model that allows for growth. Enter your answers 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 rsl if Schwarzentraub uses $6 million in debt with a cost of 9%. Use the APV model that allows for growth. Round your answer to one decimal place. C. Based on Vu from Part a, find VL using the MM model (with taxes) if Schwarzentraub uses $6 million in 9% debt. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. million Based on Vu from Part a, find rs using the MM model (with taxes) if Schwarzentraub uses $6 million in 9% debt. Round your answer to one decimal place
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