HiTech Solutions is expected to have sales of 118340000 next year. Their cost of goods sold...

HiTech Solutions is expected to have sales of 118340000 next year. Their cost of goods sold is 37% of their sales and their SG&A is 22% of sales. The firms corporate tax rate is 35%. It is expected that 550000 of operating cash flow will be invested in new fixed assets each year. Depreciation for the year will be 225000. After the coming year, cash flows are expected to grow at 4% per year forever. The appropriate rate for their cash flows is 16& per year. The firm has outstanding debt with a market value of $200 million, a face value of $150 million and a coupon of 4%. It will maintain that level over time. The total value of the equity of F&G manufacturing company should be how much when using the Free Cash Flow to the Firm method?

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jeff jeffy answered 1 year ago

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