Question
Please show steps for the below. Moneyball sports had earnings before interest and tax of $300 million last year, a Depreciation expense of $50 million,
Please show steps for the below.
Moneyball sports had earnings before interest and tax of $300 million last year, a Depreciation expense of $50 million, net captial expenditures of $100 million and added $10 million to its net working capital. These figures are all expected to grow at a constant rate of 5% indefinitely. The firm finances with 50% debt and 50% equity and the tax rate is 30% Before tax cost of debt is 10% and the cost of equity is 22%.
- Find the FCFF for the past year
Answer $150m
- What is the total value of the firm?
Answer $1657.89 m
- What is the FCFE0 for this firm? Assume a before - tax interest expense of $40 million and an increase of $75m in debt in the past year. Answer $197m
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