Using the information below, answer the questions:

Firm named Galaxy had a free cash flow (FCF) in the prior year of $13 million.

Galaxy's debt-to-equity ratio is 1.25

Galaxy's market value of debt is 150 million

Galaxy's tax rate is 25%

Galaxys FCF will grow at a constant rate of 3%

Galaxys equity beta is 1.3

US 3 month T-bill rate is 1.5%

S&P 500 market return is 7.5%

Currently Galaxy Interiors do not pay dividends.

#1) What is asset beta?

#2) What is the required return (k) that need be used in FCF valuation?

#3) What is Galaxy Interiors current total FIRM VALUE using the FCF Valuation model?

#4) If there were 10 million shares outstanding, what should be the stock value per share using the FCF Valuation model?

		#1) asset beta = 0.75
		#1) asset beta = 0.67
		#1) asset beta = 1.25
		#2) required return, k = 4.55%
		#2) required return, k = 6.57%
		#2) required return, k = 5.53%
		#3) current total FIRM value = approx. $530 million
		#3) current total FIRM value = approx. $650 million
		#3) current total FIRM value = approx. $420 million
		#4) stock price per share = approx. $84
		#4) stock price per share = approx. $59
		#4) stock price per share = approx. $38