Question: You are planning to value Fancy Ltd using a Free Cash Flow to the Firm (FCFF) approach. You have assembled the following information: - The

You are planning to value Fancy Ltd using a Free Cash Flow to the Firm (FCFF) approach. You have assembled the following information:

You are planning to value Fancy Ltd using a Free Cash Flow to the Firm (FCFF) approach. You have assembled the following information: - The company has 1,600 million shares outstanding - The market value of debt is $6,000 million - Forecast FCFF is $1,600 million - Equity beta is 0.8, the equity risk premium is 6% and the risk-free rate is 5% - The before-tax cost of debt is 7% - The tax rate is 30% - Expected growth of FCFF is 3%. - Assume Debt/(Debt + Equity )=25% 15 What is the value of the firm? Select one alternative: $29 billion $27 billion $26 billion $25 billion $28 billion

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