Sterling case study

A. What is the cost of equity capital appropriate for evaluating the free cash flows associated with this investment? What is the correct capital structure and weighted average cost of capital for discounting the investments free cash flow?

B. What are the amounts and timing of the acquisition investments free cash flow from 2013 through 2022? What is the terminal value of the final 10 years of the acquisition, as of 2022? What is the net present value to Sterling of this base investment? What are the amounts and timing of the follow-up expansion investment opportunitys free cash flow from 2013 through 2022? What is the terminal value of the follow-up acquisition, as of 2022? What is the net present value of this follow-up investment and the combined base and expansion investments?