A company has the following projected free cash flows:
C1 = -$50,000,000 C2 =
-$40,000,000 C3 =
-30,000,000 C4 = ????
(a) If you apply the growing perpetuity model with a growth rate
of 6% and a discount rate of 10% beginning in time 4 and in
perpetuity thereafter, what number do you need to insert for
C4 to have a market value of equity of 1 billion?
(b) If the company has $500,000,000 in semi-annual bonds
outstanding with 7.5%...