1. In what case will using dividends expected to be paid to shareholders yield the same valuation for the firm as using free cash flows expected to be generated by the firm?
2. Capacity Usage and Growth (LO2) In the previous problem, suppose the firm was operating at only 80 percent capacity in 2015. What is EFN now?
3. Kaiser aluminum has a beta of 0.70. if risk free rate is 5% and market risk premium is 7.2%, what's the firm's cost of equity from retained earnings based on the capm?