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Free Cash Flow ModelFCF = EBIT * ( 1 - T ) + Depreciation Capital Spending Change in Net Working Capital 1 0 ) Assume

Free Cash Flow ModelFCF = EBIT*(1-T)+ Depreciation Capital Spending Change in Net Working Capital10) Assume Company F has $200 million in Debt and 40 million shares of common stock outstanding. The Company is expected to generate FCF of 30 million in year 1. The FCF in year 2 is expected to be $40 million, and the FCF in year 3 is expected to be $44 million. After year 3 the companys FCF is expected to grow at a constant rate of 4%.a. What is your estimate of the market value of equity per share if the WACC is 9%?b. What is your estimate of the market value of equity per share if the WACC is 11%?

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