Question
For ABX Inc., the risk premium is 6% and the risk free rate is 3%. The firms corporate income tax rate is 30% and the
For ABX Inc., the risk premium is 6% and the risk free rate is 3%. The firms corporate income tax rate is 30% and the debt-to-equity ratios is 40%. The total market value of debt is $120M. Its equity beta is 1.5. Its free cash flow is $30M and is expected to grow at a constant rate of 5% forever. What is the value of equity?
A. $506.09
B. $623.67
C. $358.56
D. $390.34
E. $402.41
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Financial Terms Dictionary Investment Terminology Explained
Authors: Thomas Herold, Wesley Crowder
1st Edition
1521725764, 978-1521725764
