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Please answer the following questions in Excel: - Your firm is attempting to value Bulldog Cable Company (BCC), a mid-sized regional cable company with operations

Please answer the following questions in Excel:

- Your firm is attempting to value Bulldog Cable Company (BCC), a mid-sized regional cable company with operations in Utah and Wyoming. Analysts at your firm have made the following estimates (in millions; assume a December 31st year end, that all cash flows occur at the end of the year, and that the 2016 cash flow is exactly one year away):

2016

2017

2018

2019

2020

2021

Net sales

$450

$518

$555

$600

$643

Selling and administrative expenses

$45

$53

$60

$68

$73

Interest

$28

$26

$27

$25

$22

Depreciation

$21

$22

$26

$20

$19

Net working capital

$800

$850

$930

$1,005

$1,075

$1,150

Other important assumptions:

Tax rate: 35%

Cost of goods sold as % of sales: 65%

BCC's unlevered (or asset) beta: 0.8

Risk-free rate: 3%

Market risk premium: 4% Terminal growth rate (g): 2%

Pre-tax cost of debt: 5.6%

BCCs optimal capital structure is 70% debt (and therefore 30% equity). There are no investments in fixed assets (i.e., CAPEX) planned for BCC in the future. Using free cash flow valuation, what is BCCs enterprise value?

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