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You are valuing a company at year end 2023, using the Free Cash Flow to the Firm (FCF) model, that has a target capital structure
You are valuing a company at year end 2023, using the Free Cash Flow to the Firm (FCF) model, that has a target capital structure of 70% equity and 30% debt. The estimated cost of equity is 11.0% and cost of debt (excluding tax effect) is 4.0%, respectively. The estimated stream of free cash flow to the firm (FCF) is: The expected nominal growth rate of FCF in perpetuity is 2.10%. The corporate tax rate is 20%. The estimated enterprise value is: Question 5Answer a. 133240 b. 132010
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