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Finance Questions Assignment Solution...................

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Question;(TCO B)You expect CCM Corporation to generate the following free cash flows over the next 5 years.Year12345FCF ($ millions)2528323740If CCM has $150 million of debt and 12 million shares of stock outstanding, then which is the share price for CCM closest to?A) $49.50B) $11.25C) $20.50D) $22.75******************TCO E)DivisionAssetBetaNext Period's Expected Free CashFlow ($mm)ExpectedGrowthRateOil Exploration1.44504.0%Oil Refining1.15252.5%Gas and Convenience Stores0.86003.0%The risk-free rate of interest is 3% and the market risk premium is 5%.1) Which is the cost of capital for the oil exploration division closest to?A) 6.0%B) 7.0%C) 8.5%D) 10.0%

 

Paper#48233 | Written in 18-Jul-2015

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