Eastern Inc. is an all-equity firm with two divisions.The cosmetic division has an asset beta of 0.6, expects to generate a free cash flow of $79 million by the end of this year (year 1), and anticipates a 4% perpetual growth rate.The coal mining division has an asset beta of 1.1, expects to generate a free cash flow of $236 million by the end of this year (year 1), and anticipates a 2% perpetual growth rate.Suppose the risk-free rate is 2% and the market risk premium is 5%. What is the value of cosmetic division in million dollars?

Disregard your answers to the previous question. Now, assume that the cosmetic business has a valuation of $1,427 million and a beta of 0.7 with a perpetual growth rate of 4%, and the coal mining business has a valuation of $997 million and a beta of 1.2 with a perpetual growth rate of 1%. Suppose the risk-free rate is 2% and the market risk premium is 5%. Eastern Inc. is an all-equity firm. What is Eastern Inc’s current cost of capital? (Hint: first, need to calculate the current equity beta for Eastern Inc.) Note: Enter your final answers in percentage points in X.X format. e.g. if your answer is 10.654%, enter 10.7 Your answer is:

Based on the information given, if the risk-free rate of interest is 3% and the market risk premium is 5%.DivisionAsset BetaFree Cash Flows ($m)Expected Growth RateOil Exploration1.44504.0%Oil Refining1.15252.5%Gas & Convenience Stores0.86003.0% The total value of the firm is closest to:A.$15,000B.$37,000C.$21,500D.$31,250

A firm has an operating profit of $120 million, pays interest of $20 million, and pays corporate tax at 30%. All cash flows will grow by 3% per year in perpetuity. The firm’s equity beta is 1.0, the market risk premium is 6% and the risk-free rate is 5%. What is the value of equity assuming no reinvestment needs and no depreciation?A.$909 millionB.$875 millionC.$1,250 millionD.$636 million

Calculate the expected return (as a percentage) for Company X, which has a beta of 0.9 when the risk-free rate is 4.8% and you expect the equity risk premium to be 9.8%.

Bright Future Corporation (BFC) is ready to launch a new product. Depending upon the success of this product, BFC will have a value of either $100 million, $150 million, or $191 million, with each outcome being equally likely.  The cash flows are unrelated to the state of the economy (i.e. risk from the project is diversifiable) so that the project has a beta of 0 and a cost of capital equal to the risk-free rate, which is currently 5%.  Assume that the capital markets are perfect. Assume that in the event of default, 20% of the value of BFC's assets will be lost in bankruptcy costs and suppose that BFC has zero-coupon debt with a $125 million face value due next year.2.  The initial value of BFC’s equity is closest to