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Kindly help I'll surely give thumps for correct answer. Assume you've forecasted and calculated the following Free Cash Flows to the Firm. Year FCFF 1

Kindly help I'll surely give thumps for correct answer.

Assume you've forecasted and calculated the following Free Cash Flows to the Firm.

Year

FCFF

1 : $7,389

2: $8,993

3: $9,744

You have also made the assumption that after year 3, the company will grow by a rate of 2.8%.

Further suppose that the company has a current share price of $88.99 and a total of 4.5 million shares outstanding. The company currently has debt with a total face value of $891 million. These outstanding bonds are currently priced to yield 8.9% while quoting at 97% of total face value. The current t-bill rate is 1.1% and the market risk premium is 5.3%. We've estimated the to be 1.84. The marginal tax rate is 21%. Given this information, what is the value of this firm?

  • $189,971
  • $167,016
  • $167,360
  • $156,307

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