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Your company is considering acquiring Duff Beer, a company that fits well with the strengths of your company. You estimate that Duff Beer may yield

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Your company is considering acquiring Duff Beer, a company that fits well with the strengths of your company. You estimate that Duff Beer may yield $7,204 of free cash flow each year if it is all-equity financed. Your company plans to finance Duff Beer with 35% debt. The rest of its capital will be equity. With the proposed capital structure, you estimate that the required rate of return on the equity is 9% and the business can borrow at an interest rate of 4%. The corporate tax rate is 21%. Please find the value of Duff Beer as a business with the proposed capital structure

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