1. Assume adding debt never reduces the Company XYZ’s WACC and the company plans to have $200M in debt on the balance sheet. Company XYZ’s FCFFs are expected to remain to remain at a constant $50 for only the next 10 years (i.e. there are no FCFFs after year 10). If you were a private equity firm buying all of Company XYZ’s assets, what is the most you would pay?

A) $359

B) $372

C) $385

D) $769

E) $870

2. Which of the following are a part of the warranty of Quality?

warranty of title

warranty of merchantability

warranty right of 3rd parties

all of the above