Question: Need help finding the formulas and solutions for question D Your employer, a midsized human resources management company. is considering expansion into related elds. including

Need help finding the formulas and solutions for question D

Your employer, a midsized human resources management company. is considering expansion into related elds. including the acquisition of Temp Force Company an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. Your employer is also considering the purchase of Biggerstaff Ea McDonald [1351M]. a privately held company owned by two friends, each with 5 million shares of stock. 138ml currently has free cash flow of $24 million, which is expected to grow at a constant rate of 5%. BSzM's financial statements report shortterm investments of $100 million, deht of$200 million, and preferred stock of $50 million. BSd'n'I's weighted average cost of capital [WAGE] is 11%. Answer the following questions: cl. Suppose the free cash ow at Time 1 is expected to groinr at a constant rate of BL forever. [f 5:. a: WAGE , what is a formula for the present Tralue of expected free cash ows when discounted at the WAGE? Ifthe most recent free cash ow is expected to grow at a constant rate ofgL forever [and EL ac WAGE ], what is a formula for the present value of expected free cash ows when discounted at the WAGE

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