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Required: The MoMi Corporation's cash flow from operations before interest and taxes was $1.7million in the year Just ended, and it expects that this will
Required: The MoMi Corporation's cash flow from operations before interest and taxes was $1.7million in the year Just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to Invest an amount equal to 17% of pretax cash flow each year. The tax rate is 21%. Depreclation was $230,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The approprlate market capltalization rate for the unleveraged cash flow is 12% per year, and the firm currently has debt of $3 million outstanding. Use the free cash flow approach to calculate the value of the firm and the firm's equlty. (Enter your answer in dollars not in millions.) Required: The MoMi Corporation's cash flow from operations before interest and taxes was $1.7million in the year Just ended, and it expects that this will grow by 5% per year forever. To make this happen, the firm will have to Invest an amount equal to 17% of pretax cash flow each year. The tax rate is 21%. Depreclation was $230,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The approprlate market capltalization rate for the unleveraged cash flow is 12% per year, and the firm currently has debt of $3 million outstanding. Use the free cash flow approach to calculate the value of the firm and the firm's equlty. (Enter your answer in dollars not in millions.)
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