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please post formulas used 1. A company has an expected free cash flow of $180 in perpetuity and a required rate of return of 15%
please post formulas used
1. A company has an expected free cash flow of $180 in perpetuity and a required rate of return of 15% (all equity financed) and an initial investment of $1000. What is the value of the firm using the excess free cash flow valuation? 2. Company S is a very small company in terms of market capitalization, has total assets of $2 million financed 40 percent with debt and 60 percent with equity capital. The cost of debt is 7 percent before taxes. The cost of equity capital is 12 percent. The company has a net income of $200,000 and a tax rate of 30 percent. Calculate the Residual Income for this company. 3. The book value per share is $20.00 and ROE is 15%, the required return on equity is 10% and you compute that residual income growth rate is 7%. And the stock price on the market is $80.00 Calculate the implied growth rate of this stock Step by Step Solution
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