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Please follow the instructions closely. Thank you very much for the help! In the problem below, you can use a risk premium of 5.5% if

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Please follow the instructions closely. Thank you very much for the help!

In the problem below, you can use a risk premium of 5.5% if none is specified. Work must be done in an Excel spreadsheet, formulas used should be Excel Formulas. Explain the formulas used if possible. Show charts if possible and explain why those charts were chosen. 9. Lockheed, one of the largest defense contractors in the United States, reported an EBITDA of $1,290 million in a recent financial year, prior to interest expenses of $215 million and depreciation charges of $400 million. Capital expenditure amounted to $450 million during the year, and working capital was 7% of revenues (which were $13,500 million). The firm had debt outstanding of $3.068 billion (in book value terms), trading at a market value of $3.2 billion, and yielding a pretax interest rate of 8%. There were 62 million shares outstanding, trading at $64 per share, and the most recent beta is 1.10 . The tax rate for the firm is 40%. (The Treasury bond rate is 7%.) The firm expects revenues, earnings, capital expenditures, and depreciation to grow at 9.5% a year for the next five years, after which the growth rate is expected to drop to 4%. (Even though this is unrealistic, you can assume that capital spending will offset depreciation in the stable-growth period.) The company also plans to lower its debt/equity ratio to 50% for the steady state (which will result in the pretax interest rate dropping to 7.5% ). The firm earned earnings before interest and taxes of $450 million, which includes the interest income on the current cash balance of $50 million. The firm's tax rate is 40%. The firm is in stable growth, and its earnings from operations are expected to grow 5% a year. The net capital expenditures next year are expected to be $90 million. A. Estimate the value of the firm

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