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Schwarzentraub Corporation's expected free cash flow for the year is $650,000; in the future, free cash flow is expected to grow at a rate of
Schwarzentraub Corporation's expected free cash flow for the year is $650,000; in the future, free cash flow is expected to grow at a rate of 9%. The company currently has no debt, and its cost of equity is 14%. Its tax rate is 25%. Suppose the firm issues $4 million debt at a rate of 6%. Use the compressed adjusted value approach to answer the following questions. Do not round intermediate calculations. a. Find Vy. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. $ million b. Find VL. Use the APV model that allows for growth. Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answer to two decimal places. $ million Find rsl. Use the APV model that allows for growth. Round your answer to one decimal place. %
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