Zeta Technologies Has the Following Projections A) $21,165
B) $23,282
C) $25,610
D) $28,171
E) $30,988

question 30

Multiple Choice

Zeta Technologies has the following projections.It has no non-operating assets.Calculate Zeta's intrinsic value of equity using the FCFE model. $\begin{array}{cccc}&\text { Current }\\&{\text { year }} & \text { Year 1 } & \text { Year 1 } & \text { Year 3 } \\\text { FCF }&\mathrm{NA} & \$ 1,000 & \$ 1,200 & \$ 1,248 \\\text { Total debt }&\$ 3,000 & \$ 3,900 & \$ 4,290 & \$ 4,462\\\text { Interest rate on debt } & 6 \% & 6 \% & 6 \% & 6 \% \\\text { Tax rate } & 25 \% & 25 \% & 25 \% & 25 \%\\\text { Long-term growth rate } & 4 \% \\\text { Required return on } & \\\text { equity } & 9 \%\end{array}$

• A) $21,165
• B) $23,282
• C) $25,610
• D) $28,171
• E) $30,988

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Definitions:

Sentenced To Prison

The legal punishment where an individual is required to spend a specified period of time incarcerated in a prison facility.

Hedonic Treadmill

A theory suggesting that people maintain a relatively constant level of happiness despite changes in fortune or achievements due to quickly adjusting expectations.

Happiness Or Unhappiness

A state of well-being characterized by emotions ranging from contentment and satisfaction to joy, or the lack thereof.

Constant Levels

Conditions or values in an experiment or study that are kept the same throughout the procedure to ensure that the results are due to the variable being tested.