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growth rate of this FCF is 6.5%. Yancey has no debt in its current capital structure. Its Cost of Equity is 11.5%. Its tax rate is 35%. (Hint use Equations 26-16 and 26-17 from the textbook.)

find out the Unlevered Value of Yancey (Vu).

find out VL and rsL for the scenario whereby Yancey uses $8.0 Million Debt costing 8%.

Using the Unlevered Value from above find out VL and rsL by using the M&M Model (with taxes) for Yancey using $8.0 Million Debt costing 8%.

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  • Reference No.:- M945174

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