What is total corporate value

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Reference no: EM132985845

The first acquisition target is a privately held company in a mature industry. The company currently has free cash flow of $20 million. Its WACC is 10% and it is expected to grow at a constant rate of 5%. The company has marketable securities of $100 million. It is financed with $200 million of debt, $50 million of preferred stock, and $210 million of book equity.

Problem 1:
What is its total corporate value?

Problem 2:
What is its value of equity?

Problem 3:
What is its value of operations?

Problem 4:
What is its MVA (MVA =Total corporate value - Total book value)?

Reference no: EM132985845

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