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Need asap Knappa Valley Winery's (KVW) most recent FCFF is $4,500,000. KVW's target debtto-equity ratio is 0.25. The market value of the firm's debt is
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Knappa Valley Winery's (KVW) most recent FCFF is $4,500,000. KVW's target debtto-equity ratio is 0.25. The market value of the firm's debt is $10 million and KVW has 2 million shares of common stock outstanding. The firm's tax rate is 35%, the shareholders require a return of 15% on their investment, the firm's before-tax cost of debt is 8%, and the expected long-term growth rate in FCFF is 6%. Calculate the value of the firm. $77.97 million $78.97 million $79.97 million $80.97 million Page 13 of 20 Knappa Valley Winery's (KVW) most recent FCFF is $4,500,000. KVW's target debtto-equity ratio is 0.25. The market value of the firm's debt is $10 million and KVW has 2 million shares of common stock outstanding. The firm's tax rate is 35%, the shareholders require a return of 15% on their investment, the firm's before-tax cost of debt is 8%, and the expected long-term growth rate in FCFF is 6%. Calculate the value of the firm. $77.97 million $78.97 million $79.97 million $80.97 million Page 13 of 20 Step by Step Solution
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