KYZ Inc. is expected to have $ 8 million free cash flow ( CFFA ) in the

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Question:

KYZ Inc. is expected to have

8

million

free cash flow

(

CFFA

)

in the coming year. This free cash flow will grow at a rate of

3 %

per year thereafter. KYZ has an cost of equity of

13 %,

a cost of debt of

7 % .

It is in the

35 %

corporate tax bracket. If KYZ

'

s current debt to equity ratio is

0.5,

the value of KYZ as an all equity firm would be

___

million.

Related Book For answer-question

Intermediate Financial Management

ISBN: 978-1285850030

12th edition

Authors: Eugene F. Brigham, Phillip R. Daves

See More Books

Posted Date: Feb 10, 2024 12:46 AM

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KYZ Inc. is expected to have $ 8 million free cash flow ( CFFA ) in the

Question:

Expert Answer:

The value of KYZ as an allequity firm would be calculated using the Gordon growth model also known a... View the full answer

Intermediate Financial Management

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