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Beach & Company reported EBIT grow at a rate of 5 rate for the fo equity beta is 1.25, the risk-free millions)? Multiple Choice $919.46 $787.29 $655.02 $1,025.95 $840.95

Beach & Company reported EBIT grow at a rate of 5 rate for the fo equity beta is 1.25, the risk-free millions)? Multiple Choice $919.46 $787.29 $655.02 $1,025.95 $840.95

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Beach & Company reported EBIT of $40 million for last year. Depreciation expense totaled $18 million and capital expenditures came to $8 million. Free cash flow is expected to grow at a rate of 5 rate for the foreseeable future. Beach faces a 21 percent tax rate and has a .50 debt to equity ratio with $200 million (market value) in debt outstanding. Beach's equity beta is 1.25, the risk-free rate is currently 4.5 percent and the market risk premium is estimated to be 8 percent. What is the current total value of Beach & Company (in millions)? Multiple Choice $919.46 $787.29 $655.02 $1,025.95 $840.95
Transcribed Image Text:Beach & Company reported EBIT of $40 million for last year. Depreciation expense totaled $18 million and capital expenditures came to $8 million. Free cash flow is expected to grow at a rate of 5 rate for the foreseeable future. Beach faces a 21 percent tax rate and has a .50 debt to equity ratio with $200 million (market value) in debt outstanding. Beach's equity beta is 1.25, the risk-free rate is currently 4.5 percent and the market risk premium is estimated to be 8 percent. What is the current total value of Beach & Company (in millions)? Multiple Choice $919.46 $787.29 $655.02 $1,025.95 $840.95
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