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1. What is the value of a company that had free cash flow of $150 million in the most recent year if the free cash flow is expected to grow by 4% per year. The required rate of return for the stock is 13% and the WACC is 10%.

2. What is the WACC for a firm with the following information?

50 million shares outstanding

Total debt of $1.1 billion

Cost of debt of 7.5%

Marginal tax rate of 35%

Share price of $35

Cost of equity of 12.5%

3. What is the required rate of return on a stock with a beta of 0.8 if the risk-free rate is 2.2% and the expected return on the market is 9.9%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92748269

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