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FUFU is looking to see whether acquiring WWW is a good idea in order to evaluate this deal. FUFU is looking at the following information.
FUFU is looking to see whether acquiring WWW is a good idea in order to evaluate this deal. FUFU is looking at the following information.
Anticipated FCFSs for WWW are:
CF:
CF:
CF:
Bond for FUFU:
Price:
Yearly coupon:
Maturity: years
Face value:
Bond for WWW:
Price:
Yearly coupon:
Maturity: years
Face value:
Beta for FUFU:
Beta for WWW:
Market return:
Risk free rate:
Growth rate for WWW:
DE ratio for FUFU:
DE ratio for WWW:
Tax rate for FUFU:
Tax rate for WWW:
What is the proximate cost of debt for Fufu before taxes?
A
B
C
D
Continuing with the previous question, what is the cost of debt for WWW
A
B
C
D
Continuing with the previous question, what is the cost of equity for WWW
A
B
C
D
Continue with the previous question what is the approximate WACC for fufu?
A
B
C
D
Continuing with the previous question what is the approximate WACC for WWW
A
B
C
D
Continuing with the previous question what is a Terminal value for year three for WWW
A
B
C
D
What should the approximate price for WWW
A
B
C
D
If Fufu acquires WWW What would be the approximate NPV of this investment?
A positive
B negative
C negative
D positive
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