Sports unlimited is expected to generate free cash flows of, Financial Management

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Sports unlimited is expected to generate free cash flows of

Sports Unlimited is expected to generate free cash flows of $10.9 million per year. THe has permanent debt of $40 million, a tax rate of 40%, and an unlevered cost of capital of 10%.

a. What is the value of their equity using the APV method?

b. What is XL's WACC? What is their equity value using the WACC method?

c. If XL's debt cost of capital is 5%, what is their equity cost of capital?

d. What is their equity value using the FTE method?

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