Free cash flows during the next three years

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Suppose Alpha Company projects the following free cash flows (FCF) during the next three years, after which FCF is expected to grow at a constant rate of 4%: $20m, $40m, $50m. Its cost of debt is 6%, the tax rate is 30%, the market risk premium is 7%, and the risk-free rate is 4%. There is 40% debt in the firm. The company beta is 1.6. What is the WACC?

Reference no: EM131188529

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