1. Assume adding debt never reduces the Company XYZ’s WACC and the company plans to have $200M in debt on the balance sheet. Company XYZ’s FCFFs are expected to remain to remain at a constant $50 for only the next 10 years (i.e. there are no FCFFs after year 10). If you were a private equity firm buying all of Company XYZ’s assets, what is the most you would pay?
A) $359
B) $372
C) $385
D) $769
E) $870
2. Which of the following are a part of the warranty of Quality?
warranty of title
warranty of merchantability
warranty right of 3rd parties
all of the above