Question
Proust Company has FCFF of $1.7 billion and FCFE of $1.3 billion. Prousts WACC is 11 percent, and its required rate of return for equity
Proust Company has FCFF of $1.7 billion and FCFE of $1.3 billion. Prousts WACC is 11 percent, and its required rate of return for equity is 13 percent. FCFF is expected to grow forever at 7 percent, and FCFE is expected to grow forever at 7.5 percent. Proust has debt outstanding of $15 billion. What is the total value of Prousts equity using the FCFE valuation approach?
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
16th Edition
0357517571, 978-0357517574
