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QUESTION 6 Questions 2 - 6 are based on the following description about Bethlehema Steel Company. Bethlehema Steel is a publicly traded steel company with
QUESTION
Questions are based on the following description about Bethlehema Steel Company.
Bethlehema Steel is a publicly traded steel company with $ million in outstanding debt and $ million in market value of equity. Assuming the
firm is correctly priced. The firm's cost capital currently is and is expected to generate $ million in EBITT next year. The firm is expected
to grow in stable growth at a year in perpetuity. To support the growth, the firm needs to invest of its EBITT in fixed assets and working
capital. You believe if you acquire the control of the firm, you can sell idle assets for $ million and lower the cost of capital to Plan
Following Plan B what would be the value of the control in this case?
a
b
C
d
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