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Booker is evaluating Rockets by using the FCFF valuation approach, Booker has collected the following...

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Booker is evaluating Rockets by using the FCFF valuation approach, Booker has collected the following information (currency in dollars): Rockets has a net income of $273 million, depreciation of $97 million, capital expenditures of $167 million, and an increase in working capital of $47 million. Rockets will finance 40 percent of the increase in net fixed assets (capital expenditures less depreciation) and 40 percent of the increase in working capital with debt financing. . Interest expenses are $129 million. The current market value of Pharmet's outstanding debt is $1,521 million FCFF is expected to grow at 5 percent indehnitely . The tax rate is 32 percent. Rockets is financed with 49 percent debt and the rest for equity. The before-tax cost of debt is 10 percent, and the before tax cost of equity is 12 percent. Rockets has 10 million outstanding shares. Your task is to estimate the value of the equity per share. A

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