what is approximate Terminal Value for the 4th year (TV4) for FALCON? 1,620,370 1,238,207 1,543,209 1,423,505

what is approximate NPV of purchasing FALCON for XYZ company? -24,819 33,185 -12,815 9,711

Please consider the following information for the next 4 questions. FALCON Inc. is for sale, and there is a price tag of $1,200,000. Your company, XYZ, is considering a merger. Both companies have an identical cost of capital values (WACC). Both companies have a beta of 1.5, the market is expected to have a 19% return, and the risk-free rate is 3.5%. The forecasted free cash flows for the next 4 years for TAMU are $250,000 (FCF1), \$150,000 (FCF2), \$0 (FCF3), and $250,000 (FCF4). The company is expected to grow at 5% indefinitely after that. Both companies have a debt/equity ratio of 1/3, and the applicable tax rate is 35%. Both companies have a cost of debt (before taxes) of 7%. What is the cost of equity for both companies