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You are valuing a company at year end 2023 that has a target capital structure of 60% equity and 40% debt. The estimated cost of equity is 11% and the net cost of debt is 6%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is FCF is: 2023 7 500 2024 8 450 2025 9 230 2026 9 800 2027 10 890 The expected nominal growth rate of FCF in perpetuity is 0.95 %. At year end 2023 the estimated level of interest-bearing debt, cash, minorities, and financial investments are 11000, 8000, 2500, and 8000, respectively. The current market capitalization of the company is 134000. Your investment recommendation You are valuing a company at year end 2023 that has a target capital structure of 60% equity and 40% debt. The estimated cost of equity is 11% and the net cost of debt is 6%, respectively. The estimated stream of free cash flow to the firm (FCF) is: Values is FCF is: 2023 7 500 2024 8 450 2025 9 230 2026 9 800 2027 10 890 The expected nominal growth rate of FCF in perpetuity is 0.95 %. At year end 2023 the estimated level of interest-bearing debt, cash, minorities, and financial investments are 11000, 8000, 2500, and 8000, respectively. The current market capitalization of the company is 134000. Your investment recommendation
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1118845899
3rd edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
Posted Date:
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