Use the Information for the Question(s)below

question 17

Multiple Choice

Use the information for the question(s) below.
Suppose that Rose Industries is considering the acquisition of another firm in its industry for $100 million.The acquisition is expected to increase Rose's free cash flow by $5 million the first year,and this contribution is expected to grow at a rate of 3% every year thereafter.Rose currently maintains a debt to equity ratio of 1,its corporate tax rate is 21%,its cost of debt rD is 6%,and its cost of equity rE is 10%.Rose Industries will maintain a constant debt-equity ratio for the acquisition.
-Given that Rose issues new debt of $50 million initially to fund the acquisition,the total value of this acquisition using the APV method is closest to:

• A)$100 million.
• B)$120 million.
• C)$113 million.
• D)$115 million.

---

Definitions:

Sexual Scripts

Cultural and societal guidelines that shape and influence how individuals engage in and perceive sexual behaviors and roles.

Unacceptable Behavior

Conduct or actions that are deemed inappropriate or not in accordance with societal norms or expectations.

Moderately Muscular

Describes a physical appearance characterized by a visible but not extreme level of muscle development.

Undergraduate Women

Undergraduate women are female students who are pursuing their first degree, usually a bachelor's, at a college or university.