The annual free cash flow starting next year is expected

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Calculate the value of the firm given the following information. The firm's desired debt to total capital ratio is 40%. The firm's marginal tax rate is 40% and it's beta is 1.2. The cost of debit is 8% and the treasury yield is 4%. Assume the market risk premium to be 7%. The annual free cash flow starting next year is expected to be $4 million and is expected to grow indefinitely at the rate of 2% per year.

Reference no: EM131579388

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