QUESTION 18 Firm A acquires firm B when firm Bhas a book value of assets of $155 million and a book value of liabilities of $35 million. Firm A actually pays $175 million for firm B. This purchase would result in goodwill for firm A equal to $155 million $55 million $120 million $175 million QUESTION 19 The free cash flow to the firm is $300 million in perpetuity, the cost of equity equals 14% and the WACC is 10%. If the market value of the debt is $1 billion, what is the value of the equity using the free cash flow valuation approach? $3 billion $2 billion $1 billion $4 billion