Use the Information for the Question(s)below

question 96

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 debt to equity ratio of 1,then the value of Flagstaff as a levered firm is closest to:

• A)$114 million.
• B)$100 million.
• C)$111 million.
• D)$128 million.

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Definitions:

Cognitive Development

A theory of how thought processes, including understanding, perception, and problem-solving, develop from infancy through adulthood.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development and his theory of cognitive development stages.

Inner Thought

The private mental processes, reflections, or considerations within an individual.

Lev Vygotsky

A Soviet psychologist best known for his theories on cognitive development, particularly the social development theory which emphasizes the fundamental role of social interaction in the development of cognition.