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Question 6 1 pts The founder of a firm is considering selling it and wants to know its value You tell him you can provide
Question 6 1 pts The founder of a firm is considering selling it and wants to know its value You tell him you can provide a rough estimate using the perpetuity formula The company will generate free cash flow of $5 million over the next year and this cash flow is expected to grow at an annual rate of 3% forever. If the firm's WACC is 11%, what is the value of this company? Question7 1 pts Snappy, Inc. has a market cap of $20 million and $12 million of bank debt. The bank debt costs 5% per year. The estimated equity beta is 1. If the market risk premium is 6% and the risk-free rate is 4%, compute the weighted average cost of capital if the firm's tax rate is 30%. (Enter in decimal form. For example, enter 0.105 for 10.5%)
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