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QUESTION 9 CastraSeneca is an all-equity firm, with three divisions, 1 billion shares outstanding, the share price is $4. The A division has an asset

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QUESTION 9 CastraSeneca is an all-equity firm, with three divisions, 1 billion shares outstanding, the share price is $4. The A division has an asset beta of 0.60, expects to generate free cash flow of $50 million this year, and anticipates a 3% perpetual growth rate. The B division has an asset beta of 1 20 expects to generate free cash flow of $70 million this year, and anticipates a 2% perpetual growth rate. You cannot find reliable data for division. Suppose the risk-free rate is 4%, the market risk premium is 5%, the corporate tax rate is 21%. Which statements are correctSelect all that apply. The value of the firm is 3.9 billion. The value of division C is 1.725 billion. The value of division A is $1.250 billion. Castra Seneca's cost of capital is 8.25%. The value of division B is 2.025 billion. CastraSeneca's current equity beta is 0.85

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