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Assume That in the Years After 2015 the Company's Free

Question 11

Multiple Choice

Assume that in the years after 2015 the company's free cash flow grows 4 percent per year in perpetuity.Macklemore's WACC is 8.0 percent.BSL's WACC is 11.5 percent,and the average of the two companies' WACCs,weighted by sales,is 8.2 percent.What is the maximum acquisition price (in $ millions) Macklemore should pay to acquire BSL's equity at the end of 2010?


A) $1,976.09
B) $2,501.09
C) $2,877.09
D) $4,195.09
E) $4,571.09
F) None of the above.

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