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What is the expected FCFF

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Question - In 2020, Zip had earnings before interest and taxes of $6,200 million and had an effective tax rate of 35%. The price per share is $12 while the estimated market value of debt is $12,200 million. We assume that the firm will maintain a long term growth rate of 4%, and that reinvestment rate is 30% (useful for FCFF). The WACC is 6%. There are 200 million outstanding shares.

a) What is the expected EBIT for 2021?

b) What is the expected FCFF for 2021?

c) What is the value of the firm?

Reference no: EM132905722

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