Question
It is assumed that the CAPM assumptions are met.The firm Diary&Candy Inc. is an all equity firm with two independent divisions, The diary division and
It is assumed that the CAPM assumptions are met.The firm Diary&Candy Inc. is an all equity firm with two independent divisions, The diary division and the candy division. The diary division has an asset beta(also called the beta of the unlevered assets) of 0.59. The expected FCF next year (t=1) is DKK 47 million. The FCF is expected to grow 1.5% per year forever. The candy division has an asset beta of 0.67. The expected FCF next year (t=1) is DKK 59 million. The FCF is expected to grow 1% per year forever. The annual risk-free rate is 1.8% and the annual market risk premium is 6%. The firm has no excess cash.In which interval isthe enterprise value of Diary&Candy Inc.(in DKK million)?
Unknown problem no. 3 It is assumed that the CAPM assumptions are met. The firm Diary&Candy Inc. is an all equity firm with two independent divisions, The diary division and the candy division. The diary division has an asset beta (also called the beta of the unlevered assets) of 0.59. The expected FCF next year (t=1) is DKK 47 million. The FCF is expected to grow 1.5% per year forever. The candy division has an asset beta of 0.67. The expected FCF next year (t=1) is DKK 59 million. The FCF is expected to grow 1% per year forever. The annual risk-free rate is 1.8% and the annual market risk premium is 6%. The firm has no excess cash. In which interval is the enterprise value of Diary&Candy Inc. (in DKK million)? A. [4,420; 4,430) B. 11,880; 1,890) *C. 12,410; 2,490) D. 13,490 ; 3,570] E. (7,300; 7,370] F. [6,300; 6,320]Step by Step Solution
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