Please consider the following information for the next 4 questions (Q17 – Q20). university Inc. is for sale and there is a price tag of $225,000. Your company, ABC, who is considering the purchase, has a beta of 1.5, the market is expected to have a 20% return and the risk-free rate is 5%. The forecasted free cash flows for the next 4 years for University are 7000 (FCF1), 22000(FCF2), 0(FCF3), and 50000 (FCF4). The company is expected to grow at 4% indefinitely after that. Your company has a debt/equity ratio of 2/3 and the applicable tax rate is 35%. ABC’s cost of debt (before taxes) is 8%. What is the cost of equity for ABC company?
Term papers experts is a licensed Academic Writing Service created to offer academic help to students from all parts of the world. Our writing services are unique and offer more than just a piece of assignment. We have a pool of extremely qualified and experienced writers who do your assignments with dedication.
WEBSITE LIVE CHAT:
+1 (205) 286-5157
Any Given Deadline