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DoPharm is evaluating a takeover of Phaneuf Accelerator Inc. by using the FCF and FCFE valuation approaches. DoPharm has collected the following information for

DoPharm is evaluating a takeover of Phaneuf Accelerator Inc. by using the FCF and FCFE valuation approaches. Based on the free cash flow approach, estimate firm value of Phaneuf in millions. Based on this approach,

DoPharm is evaluating a takeover of Phaneuf Accelerator Inc. by using the FCF and FCFE valuation approaches. DoPharm has collected the following information for the current year: Phaneuf has sales of $2,000 million with 40% operating margin, depreciation of $100 million, capital expenditures of $200 million, and an increase in working capital of $40 million. Interest expenses are $50 million. The current market value of Phaneufs outstanding debt is $1,500 million. The company has retired the existing bonds for $100 million. FCF and FCFE are expected to grow at 10% for the next five years and 6% after that. The tax rate is 21%. Phaneuf financed with 40% debt and 60% equity. Its before-tax cost of debt is 7.9%, and its cost of equity is 12.5%. The number of shares outstanding is 100 million. Estimate the current year's free cash flow of Phaneuf in millions Estimate cost of capital of Phaneuf in %. Based on the free cash flow approach, estimate firm value of Phaneuf in millions. Based on this approach, what is stock price of Phaneuf?

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