Great Subs, Inc., a regional sandwich chain, is considering purchasing a smaller chain, Eastern Pizza, which is currently financed using 20% debt at a cost of 8%. Great Subs’ analysts project that the merger will result in incremental free cash flows and interest tax savings of $2 million in Year 1, $4 million in Year 2, $5 million in Year 3, and $117 million in Year 4. (The Year 4 cash flow includes the horizon value of $107 million.) The acquisition would be made immediately, if it is to be undertaken. Eastern’s pre-merger beta is 2.6, and its post-merger tax rate would be 34%. The risk-free rate is 8%, and the market risk premium is 4%. What is the appropriate rate to use in discounting the free cash flows and the interest tax savings?

 5 page (minimum) paper. The paper needs to be well-researched and written using APA guidelines. Data should come from at least five scholarly sources.

USE HEADERS WHEN WRITING THE PAPER

Part I: Understanding your Community

• Analyze how your community has changed over the past 20 years. Use policy and community concepts and theories from the learning resources to support your analysis.
• Describe your community, using research and statistics to describe socio-demographic make-up. (For example: How many persons live in the city and/or in the town? What were/are their cultural/racial characteristics? What were/are their incomes, ages, political affiliations, etc.?)

Part II: Community Assessment

• Describe a problem that the community is currently experiencing.
  • Assess the duration, intensity, and frequency of the problem.
  • Analyze the probable etiology of the problem, supporting your analysis with resources.
• Analyze the key elements and characteristics of the community that make it vulnerable to this problem.
• Analyze the key strengths of the community that give the community resilience and the potential for overcoming the problem.
• Identify major institutions (e.g., schools, factories, churches, attraction sites, etc.) and explain how these institutions contribute to or inhibit the community’s ability to address the problem?
• Explain which groups are most affected by the problem.

Part III: Community & Policy Action Plan

• Describe your proposed plan for community change.
• Explain the strategies and tactics you would you use to bring about change. Consider if you would need multiple strategies, and if so, explain which strategy would be used for each target.
• Explain any policies that may influence the ability, either supportive or prohibitive, to influence proposed community change.
• Explain what policies would need to be in place to ensure proposed plans are sustainable.