Gators Incorporated Has the Following Information for the Current Year

question 37

Multiple Choice

Gators Incorporated has the following information for the current year and projected for next year. Calculate its projected free cash flow to equity. $\begin{array}{lrr}&\text { Current }\\&\text { year } & \text { Projected } \\\text { FCF }&\text { NA } & 1,000 \\\text { Total debt }& 400 & 600 \\\text { Interest rate on debt }& 6 \% & 6 \% \\\text { Tax rate }& 25 \% & 250\end{array}$
 
 

• A) $1,066
• B) $1,173
• C) $1,290
• D) $1,419
• E) $1,561

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Definitions:

Spore-Forming

Describes organisms, typically bacteria or fungi, capable of producing spores as a means of reproduction or survival during unfavorable conditions.

Cone-Shaped

Descriptive of an object or figure with a circular base tapering uniformly to a point or apex.

Angiosperms

A large group of plants that are characterized by having flowers and producing seeds enclosed within a fruit; they are also known as flowering plants.

Fruits

The mature ovary of a flowering plant, usually containing seeds.