Question
The free cash flow to the firm is $100 million in perpetuity, the cost of equity equals 14%, and the WACC is 10%. If the
The free cash flow to the firm is $100 million in perpetuity, the cost of equity equals 14%, and the WACC is 10%. If the market value of the debt is $500 million, what is the market value of the equity using the free cash flow valuation approach?
A) $150 million B) $214 million C) $500 million D) $1,000 million
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Multinational Financial Management
Authors: Alan C. Shapiro
7th Edition
0471395307, 9780471395300
