Question
Q 1.Jake Corporation is a fast growing company, with projected free cash flows (FCFs) during the next two years of $10 million and $20 million
Q 1.Jake Corporation is a fast growing company, with projected free cash flows (FCFs) during the next two years of $10 million and $20 million respectively. After two years, the FCF is expected to grow at a constant 6% rate. Jakes WACC is 10%, and the company has $50 million dollars in debt and 5 million shares.
a.What is the firms equity value?
b.What is the price per share?
Q 2.Santiago Enterprises currently outstanding 10-year 4% annual coupon bonds have price $922.78. The companys marginal tax rate is 35%. What is Santiagos after-tax cost of debt?
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Practical Financial Management
Authors: William R. Lasher
8th edition
1305637542, 978-1305887237, 1305887239, 978-1305637542
