1. What is the value of a company that had free cash flow of $150 million in the most recent year if the free cash flow is expected to grow by 4% per year. The required rate of return for the stock is 13% and the WACC is 10%.
2. What is the WACC for a firm with the following information?
50 million shares outstanding
Total debt of $1.1 billion
Cost of debt of 7.5%
Marginal tax rate of 35%
Share price of $35
Cost of equity of 12.5%
3. What is the required rate of return on a stock with a beta of 0.8 if the risk-free rate is 2.2% and the expected return on the market is 9.9%?