Zeta Technologies Has the Following Projections A) $21,165
B) $23,282
C) $25,610
D) $28,171
E) $30,988

Multiple Choice

Zeta Technologies has the following projections.It has no non-operating assets.Calculate Zeta's intrinsic value of equity using the FCFE model. $\begin{array}{cccc}&\text { Current }\\&{\text { year }} & \text { Year 1 } & \text { Year 1 } & \text { Year 3 } \\\text { FCF }&\mathrm{NA} & \$ 1,000 & \$ 1,200 & \$ 1,248 \\\text { Total debt }&\$ 3,000 & \$ 3,900 & \$ 4,290 & \$ 4,462\\\text { Interest rate on debt } & 6 \% & 6 \% & 6 \% & 6 \% \\\text { Tax rate } & 25 \% & 25 \% & 25 \% & 25 \%\\\text { Long-term growth rate } & 4 \% \\\text { Required return on } & \\\text { equity } & 9 \%\end{array}$

A) $21,165
B) $23,282
C) $25,610
D) $28,171
E) $30,988