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XYZ is a firm that has expected free cash flows growing at a rate of 3 % in perpetuity, with an initial free cash flow

XYZ is a firm that has expected free cash flows growing at a rate of 3% in perpetuity, with
an initial free cash flow of 10 million occurring in one year. Its debt to capital ratio is expected to
remain stable at 50%. The corporate tax rate is 20%, the cost of debt is 5%, and the cost of equity is
10%. Choose those statements that are correct:
a. XYZs company cost of capital is higher than 7%.
b. XYZs WACC is lower than 8%.
c. The value of XYZ (as of today) is higher than 230 million.
d. The value of XYZs debt (as of today) is 125 million.

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