0 AutoSave Chap 2 Handout Problem (11 (2) View 9 Tell me Home Insert Draw Design Transitions Animations Slide Show Review Share Comments Il Layout ficant y L Shapes Calibri (Headings uit XX, AVM Pastc NEN side === lir Sensitivity picture lextor Section Cowort to SmartArt Arrange Ouck Styles Design Ideas 1 Chap 2 Handoul Poblem CAST Chap 2 Handout Problem Lonsider the following projection for : Actual 2007 FRIT Forecast 2009 120 40 3 2010 150 50 2011 190 55 4 20 2008 100 30 2 92 -5 10 10 2 30 + Increase n deferred taxes Capital expenditures Nel werking capital orang debt line in 69 15 -5 7 15 13 20 .... du Corporate tax rate: 38% Cost of equity is 16%, cost of debt is 10%, and debt ratio is 50% %, Interest coverage ratio (defined as EBIT-to-interest expense) is 10 After 2011, EBIT are expected to grow at 3% a. Estimate the free cash flows of Peg Inc. for the 4 years 2008 to 2011 and compute the enterprise value as of year-end 2007. b. Estimate the free cash flows to equity holders for the 4 years 2008 to 2011 and compute the equity value as of year-end 2007 C. Compute the debt value as of year-end 2007 Click to add notes Slide 1 of 1 English (United States Nales Comments + 105% 29 0 AutoSave Chap 2 Handout Problem (11 (2) View 9 Tell me Home Insert Draw Design Transitions Animations Slide Show Review Share Comments Il Layout ficant y L Shapes Calibri (Headings uit XX, AVM Pastc NEN side === lir Sensitivity picture lextor Section Cowort to SmartArt Arrange Ouck Styles Design Ideas 1 Chap 2 Handoul Poblem CAST Chap 2 Handout Problem Lonsider the following projection for : Actual 2007 FRIT Forecast 2009 120 40 3 2010 150 50 2011 190 55 4 20 2008 100 30 2 92 -5 10 10 2 30 + Increase n deferred taxes Capital expenditures Nel werking capital orang debt line in 69 15 -5 7 15 13 20 .... du Corporate tax rate: 38% Cost of equity is 16%, cost of debt is 10%, and debt ratio is 50% %, Interest coverage ratio (defined as EBIT-to-interest expense) is 10 After 2011, EBIT are expected to grow at 3% a. Estimate the free cash flows of Peg Inc. for the 4 years 2008 to 2011 and compute the enterprise value as of year-end 2007. b. Estimate the free cash flows to equity holders for the 4 years 2008 to 2011 and compute the equity value as of year-end 2007 C. Compute the debt value as of year-end 2007 Click to add notes Slide 1 of 1 English (United States Nales Comments + 105% 29