I need assistance with my Homework

Complete the following problems from the textbook and submit your answers:

Chapter 1 – P1.6 – A company has expected free cash flows of $1.45 million, $2.93 million, and $3.2 million in the next three years. Beginning in Year 4, the expected cash flows will grow by 3% in perpetuity. Measure the value of this company as of today using both a 10% and 12% discount rate.

Chapter 3 – P3.4 – A company owns a municipal bond that pays $30,000 interest annually. The company’s financial reporting (book) income before income taxes and municipal bond interest income is $200,000, which is equal to the company’s taxable income (interest on the municipal bond is not taxable). The company’s statutory income tax rate is 30%. Calculate the company’s current tax payable to the taxing authority, its financial reporting or book income before income taxes and provision for income taxes and provision for income taxes, and its effective income tax rate.

Chapter 5 – P5.1 – Assume you were going to value the companies described below. State which valuation method you would use to value the company and discuss why you would use that method.

a. A privately held company has had a stable capital structure strategy using 20% debt financing and 20 preferred stock financing and is expected to use the same capital structure in the future. Value the company as of today.

b. A publicly traded company, which has had no debt for many years, is planning to undergo a debt recapitalization. The plan call calls for the company to issue a large amount of debt – about 90% of the value of the firm – and distribute the cash to its equity holders. Over the next ten years, the company plans to repay its debt so that the company will have 20% debt financing at the end of ten years. The company’s long-run (after year ten) capital structure strategy is to maintain 20% debt financing. Value the company as of the date of the anticipated debt recapitalization.

c. Company P is acquiring Company S in a cash transaction. Company P has a capital structure strategy of 30% debt financing. Company S is in a different industry than company P and has a capital structure strategy of 10% debt strategy. Company P pl;ans to continue to use its capital structure strategy on a consolidated basis after the transaction. Value company S for this transaction.

d. A publicly traded company has been changing its capital structure over the last few years as it acquired various companies operating in various industries. The company plans to refinance itself with 20% debt financing. Value the company as of the refinancing.