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uantitative Problem 1: Assume today is December 31, 2017. Barrington Industries expects that its 2018...

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Accounting

uantitative Problem 1: Assume today is December 31, 2017. Barrington Industries expects that its 2018 after-tax operating income [EBIT(1 T)] will be $450 million and its 2018 depreciation expense will be $65 million. Barrington's 2018 gross capital expenditures are expected to be $100 million and the change in its net operating working capital for 2017 will be $20 million. The firm's free cash flow is expected to grow at a constant rate of 6.5% annually. Assume that its free cash flow occurs at the end of each year. The firm's weighted average cost of capital is 8.7%; the market value of the company's debt is $2.1 billion; and the company has 190 million shares of common stock outstanding. The

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