I need help with both questions Tropetech Inc. has an expected net operating profit after taxes, EBIT(1 - T), of $1,200 million in the coming year. In addition, the firm is expected tohave net capital expenditures of $180 million, and net operating working capital (NOWC) is expected to increase by $15 million. How much free cashflow (FCF) is Tropetech Inc. expected to generate over the next year?O $1,365 millionO $1,035 millionO $18,490 millionO $1,005 millionTropetech Inc.'s FCFS are expected to grow at a constant rate of 4.62% per year in the future. The market value of Tropetech Inc.'s outstanding debt is$4,894 million, and its preferred stocks' value is $2,719 million. Tropetech Inc. has 225 million shares of common stock outstanding, and its weightedaverage cost of capital (WACC) equals 13.86%.TermValue (Millions)Total firm valueIntrinsic value of common equityIntrinsic value per shareUsing the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table. Assume the firmhas no nonoperating assets.

Formula to calculate free cash flow: Net operating profit after taxes - Net capital expenditure -…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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Question

I need help with both questions

Tropetech Inc. has an expected net operating profit after taxes, EBIT(1 - T), of $1,200 million in the coming year. In addition, the firm is expected to
have net capital expenditures of $180 million, and net operating working capital (NOWC) is expected to increase by $15 million. How much free cash
flow (FCF) is Tropetech Inc. expected to generate over the next year?
O $1,365 million
O $1,035 million
O $18,490 million
O $1,005 million
Tropetech Inc.'s FCFS are expected to grow at a constant rate of 4.62% per year in the future. The market value of Tropetech Inc.'s outstanding debt is
$4,894 million, and its preferred stocks' value is $2,719 million. Tropetech Inc. has 225 million shares of common stock outstanding, and its weighted
average cost of capital (WACC) equals 13.86%.
Term
Value (Millions)
Total firm value
Intrinsic value of common equity
Intrinsic value per share
Using the preceding information and the FCF you calculated in the previous question, calculate the appropriate values in this table. Assume the firm
has no nonoperating assets.

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