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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 in perpetuity, with
an initial free cash flow of million occurring in one year. Its debt to capital ratio is expected to
remain stable at The corporate tax rate is the cost of debt is and the cost of equity is
Choose those statements that are correct:
a XYZs company cost of capital is higher than
b XYZs WACC is lower than
c The value of XYZ as of today is higher than million.
d The value of XYZs debt as of today is million.
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