Question
Sally Co. reported a free cash flow to the firm of $670 million last year. The interest expense to the firm was $50 million and
Sally Co. reported a free cash flow to the firm of $670 million last year. The interest expense to the firm was $50 million and the net debt increased by $71 million. The tax rate of the firm was 32%. What is the approximate market value of equity (round your answer to ’00 millions) if the FCFE grows at 2.5% forever and the cost of equity is 12%?
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
