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The following information is given about a corporation. All figures are in million dollars. Sales = 900 Long term debt = 500. The current yield
The following information is given about a corporation. All figures are in million dollars. Sales = 900 Long term debt = 500. The current yield to maturity is 8.8 percent. The coupon rate is zero. The maturity is 10 years. Find Capital expenditures and the change in working capital. The equity Beta of this company is =1.4 ROE = 15%, Tax rate = 30% Growth rate of the free cash flow = 120 %, 50 %, and 5% thereafter. Risk-free rate = 4% market risk premium = 8%. Using the information in the tables calculate the free cash flow and weighted average cost of capital (WACC) to find the value of this corporation at the end of year 2010. Assume that debt ratio, yield to maturity, risk-free rate, market risk premium, beta and other relevant ratios will stay the same for the foreseeable future
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