Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital of 7 percent and a cost of debt capital of 4%. PG's tax rate is 20 percent. PG is expected to have EBIT of $9 billion at the end of this year. If PG's cash flows to equity holders grow at 3% in perpetuity, what is the market value for PG's equity? O $179 billion O $91 billion O $185 billion O $160 billion

Prokter and Gramble (PG) currently has $25 billion outstanding debt. PG has a cost of equity capital of 7 percent and a cost of debt capital of 4%. PG's tax rate is 20 percent. PG is expected to have EBIT of $9 billion at the end of this year. If PG's cash flows to equity holders grow at 3% in perpetuity, what is the market value for PG's equity? O $179 billion O $91 billion O $185 billion O $160 billion

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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