Your company XXX is looking at YYY company to purchase it. The current price tag of YYY is $1.2 million. XXX has a beta of 1.5. The market is expected to have a return of 19% and the current 10-year t-bond pays 3.5%. YYY company is expected to have cash flows of $250,000 in year one, $150,000 in year two, and $250,000 in year four. The YYY company is expected to grow at 5% indefinitely after that. XXX company has a debt to equity ratio of 1/3 and a tax bracket of 35%. The cost of debt (before taxes) is estimated to be 7%.

What is the cost of equity for XXX company?

What is XXX's WACC?

What is the "approximate" terminal value for YYY for the 4th year (TV4)?

What is the approximate NPV of purchasing YYY?