XL Sports is expected to generate free cash flows of $11.2 million per year. XL has a
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Question:
- XL Sports is expected to generate free cash flows of $11.2 million per year. XL has a permanent debt of $35 million, a tax rate of 37%, and an unleveled cost of capital of 10.4%.
- a. What is the value of XL’s equity using the APV method?
- b. What is XL’s WACC? What is XL’s equity value using the WACC method?
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