Use the Information for the Question(s)below

question 68

Multiple Choice

Use the information for the question(s) below.
Flagstaff Enterprises expected to have free cash flow in the coming year of $8 million,and this free cash flow is expected to grow at a rate of 3% per year thereafter.Flagstaff has an equity cost of capital of 13%,a debt cost of capital of 7%,and it has a 35% corporate tax rate.
-If Flagstaff currently maintains a .5 debt to equity ratio,then the value of Flagstaff as an all-equity firm would be closest to:

• A)$80 million.
• B)$100 million.
• C)$73 million.
• D)$115 million.

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Definitions:

Walker

A mobility aid consisting of a frame that is used by individuals requiring additional support to maintain balance or stability while walking.

Spinal Cord Injury

An injury to the spinal cord that results in a loss of function, such as mobility or sensation, below the site of the injury.

Supine

Position of the patient in which the patient is resting on his or her back.

Trochanter Roll

Rolled towel support placed against the hips and upper leg to prevent external rotation of the legs.