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The following table provides background information on a per share basis for TOY Inc. in the year 0:
TOY Inc.'s target debt ratio is 30% and has a required rate of return of 12%. Earnings, capital expenditures, depreciation, and working capital are all expected to grow by 5% a year in the future. Assume that capital expenditures and working capital are financed at the target debt ratio. In year 0, what is the free cashflow to equity (FCFE) for TOY Inc.? A. $3.39. B. $4.31. C. $2.70. |