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HERE IS A SAMPLE SOLUTION WITH DIFFERENT VALUES, BE VERY CAREFUL MAKE SURE YOU USE THE VALUES FOR THIS QUESTION IN THE ABOVE WORKING, WILL

image text in transcribed HERE IS A SAMPLE SOLUTION WITH DIFFERENT VALUES, BE VERY CAREFUL MAKE SURE YOU USE THE VALUES FOR THIS QUESTION IN THE ABOVE WORKING, WILL UPVOTE FOR CORRECT ANSWERS.

image text in transcribed ta1: \\( \\mathrm{V}_{\\mathrm{U}}=\\$ 39.790541 \\) billion ta2: \\( \\mathrm{V}_{\\mathrm{L}}=\\$ 56.531041 \\) billion ta3: \\( \\mathrm{MV}_{\\mathrm{E}}=\\$ 8.701041 \\) billion ta4: \mathrmRmathrmWACC=10.417286 A correct answer is 39.791 , which can be typed in as follows: 39.791 A correct answer is 56.531 , which can be typed in as follows: 56.531 A correct answer is 8.701 , which can be typed in as follows: 8.701 A correct answer is 10.42 , which can be typed in as follows: 10.42 LoveFinderrz - with two \"R's\" and a \"Z\" - is a firm that runs a matchmaking app of the same name. The same really dumb, really forgettable name. Like a really dumb, uncreative, super sweaty name. LoveFinderrz expects to earn pre-tax operating income of \\( \\$ 12.69 \\) billion each year going forward in perpetuity. The firm has an unlevered cost of capital of \12.9 per annum and is expected to continue to pay corporate tax at a rate of \37.5 for the forseeable future. LoveFinderrz also has \\( \\$ 80.50 \\) billion of interest-only debt outstanding that currently trades at par. This level of debt financing, which the firm intends to maintain permanently, attracts no costs of financial distress. Assume that LoveFinderrz exists in a world where the only capital market imperfection is the presence of corporate taxes. A) What is the value of LoveFinderrz if it had no debt (i.e. its unlevered firm value)? billion (Round your answer to 3 decimal places) Incorrect answer. HINT: The unlevered value of the firm (i.e. \\( V_{U} \\) ) is the present value of its unlevered firm free cash flows (i.e. FCFF or Free Cash Flow to the Firm) when discounted at its unlevered cost of capital (i.e. \\( \\mathrm{R}_{\\mathrm{U}} \\) ). \\[ \\mathrm{V}_{\\mathrm{U}}=\\frac{\\mathrm{FCFF}}{\\mathrm{R}_{\\mathrm{U}}} \\] Those FCFFs are the same type of unlevered cash flow that you have learned how to calculate in the Capital Budgeting + Project Incremental Cash Flow topic. In these capital structure questions with constant (ungrowing) perpetual cash flows, those FCFFs will typically not require you to factor in any net reinvestment (i.e. excess of capital expenditure over depreciation or reinvestment in working capital). Instead, it can be approximated by the firm's after-tax operating income (i.e. \\( \\operatorname{EBIT}\\left(1-\\mathrm{T}_{\\mathrm{C}}\ ight) \\) or NOPAT). B) What is the value of LoveFinderrz with debt (i.e. its levered firm value)? billion (Round your answer to 3 decimal places) Your last answer was interpreted as follows: 91.67 Correct answer, well done. C) What is the market value of LoveFinderrz'equity? billion (Round your answer to 3 decimal places) Your last answer was interpreted as follows: 11.17 D) What is the Weighted Average Cost of Capital (i.e. WACC) for LoveFinderrz? \ (Round your answer to \\( \\underline{2} \\) decimal places) Your last answer was interpreted as follows: 8.65 Correct answer, well done

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