You are a professional corporate raider and your assistant just identified a potential take-over target: Yummie Plc. ("YMP"). Your assistant has obtained the following financial statements for the firm. All figures are in million. Income Statement Balance Sheet (Balance Sheet is consolidated as of Dec. 31st of each year) a). Calculate the YMP's free cash flow in 2005. Assume that the tax rate is 40% and that all the cash on balance sheet is excess cash (not needed for operations). b). For a firm in the same industry as YMP, the average un-levered beta is 1. YMP has been pursuing a financial policy with a target Debt/Equity ratio of 2 . Assume risk-free rate is 4% and the market risk premium is 5%. Assume that YMP's debt is risk-free and thus its pre-tax cost of capital is also 4%. (This is the same as assuming that the beta of debt is 0). What is the company's WACC? c). YMP is in a no-growth industry and so you assume that the FCF for the firm will remain constant forever. What is value of the firm in 2005 ? Activa You are a professional corporate raider and your assistant just identified a potential take-over target: Yummie Plc. ("YMP"). Your assistant has obtained the following financial statements for the firm. All figures are in million. Income Statement Balance Sheet (Balance Sheet is consolidated as of Dec. 31st of each year) a). Calculate the YMP's free cash flow in 2005. Assume that the tax rate is 40% and that all the cash on balance sheet is excess cash (not needed for operations). b). For a firm in the same industry as YMP, the average un-levered beta is 1. YMP has been pursuing a financial policy with a target Debt/Equity ratio of 2 . Assume risk-free rate is 4% and the market risk premium is 5%. Assume that YMP's debt is risk-free and thus its pre-tax cost of capital is also 4%. (This is the same as assuming that the beta of debt is 0). What is the company's WACC? c). YMP is in a no-growth industry and so you assume that the FCF for the firm will remain constant forever. What is value of the firm in 2005 ? Activa