EQ - 20: Please answer the question below for my practice review! Thank you :)

Firm A is expected to have a free cash flow of $2.8 billion next year, which is expected to grow at 3% per year forever. Firm B is a competitor of Firm A and has a market value of equity of $50 billion. Firm B is expected to pay a dividend of $0.65 per share and each share trades for $25. The growth rate in dividends of Firm B is expected to be 7% per year. Also, Firm B has $25 billion of debt that trades with a yield to maturity of 9%. The tax rate for both firms is 35%. What is the enterprise value of firm A ? using the free cashflow model? $22.8 billion $60.3 billion $12.4 billion $52.3 billion Firm A is expected to have a free cash flow of $2.8 billion next year, which is expected to grow at 3% per year forever. Firm B is a competitor of Firm A and has a market value of equity of $50 billion. Firm B is expected to pay a dividend of $0.65 per share and each share trades for $25. The growth rate in dividends of Firm B is expected to be 7% per year. Also, Firm B has $25 billion of debt that trades with a yield to maturity of 9%. The tax rate for both firms is 35%. What is the enterprise value of firm A ? using the free cashflow model? $22.8 billion $60.3 billion $12.4 billion $52.3 billion