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Question: assume all future cash flows fcff fcfe and dividends will...

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Assume all future cash flows (FCFF, FCFE, and Dividends) will grow at a constant sustainable growth rate (g) in perpetuity; policy. The companys cost of debt is 20% while the companys cost of equity is 30%; the company has an effective tax rate of 35%. Use the following information in the table below to help answer problems 26-27: nd ide FCFE Today (T-0) FCFF Today (T O) Shareholder Equity Total Debt Total Assets Net Income Dividends Shares Outstanding in millions 800 750 400 600 1000 100 40 25 26. An activist investor who wants to purchase all the companys shares would be willing to pay approximately Do not use the DDM. Use either FCFF or FCFE, whichever is appropriate. a. $165 per share b. $176 per share c. $213 per share d. $230 per share e. $245 per share 27. A private equity group who wants to purchase all of the companys assets would be willing to pay approximately Do not use the DDM. Use either FCFF or FCFE, whichever is appropriate. a. $9,583M b. $10,222M c. $10,518M d. $17,969M e. $19,167M

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