Problem 6 (15 points) ABC Industries is considering the acquisition of another firm in its industry for $100 million. The acquisition is expected to increase ABC's free cash flow by $5 million the first year and this contribution is expected to grow at a rate of 3% every year thereafter. ABC currently maintains a debt to equity ratio of 1 /2, its marginal tax rate is 40%, its cost of debt is 6%, and its equity cost of capital is 10%. ABC Industries wl maintain a constant debt-equity ratio for the acquisition. Use the WACC, the APV and the FTE method to find the value of this acquisition