Question 8. Use the provided information for ABC, Inc. (ABC) to solve the questions. SHOW ALL WORK. ---GIVEN--- WACC: Beta = 0.95 Market Return = 10.50% Risk Free Rate = 1% Weight of Debt = 10% Weight of Equity = 90% After-Tax Cost of Debt = 3%

DDM: Dividend/Share in Year One = D(1) = $1.55/share Terminal Gr = 3% Interim Gr = 5% Blended Weight = 20%

DCF: Free Cash Flow in Year One = FCF(1) = $899 Terminal Gr = 3% Interim Gr = 7% Total Debt = $455 Cash & Cash Eq. = $135 Shares Outstanding = 300 Blended Weight = 60%

P/E: Next Year EPS = $0.75/share. Current P/E = 45 Blended Weight = 20%

What is ABC's WACC? What is ABC's current target price using the dividend discount model (DDM)? What is ABC's current target price using the discounted cash flow model (DCF)? What is ABC's current target price using price-to-earnings multiple (P/E)? What is ABC's blended current target price?