Dozier Corporation is a fast-growing supplier of office products. Analysts project the following FCF during the next 3 years, after which FCF is expected grow at a constant 8 percent. Dozier’s WACC = 13%. Time YEAR 1 2 3 4 FCF (million) 20 30 40 8% growth 1. What is Dozier’s terminal, or horizon value (value of operation at time 3 for constant part)? 2. What is the current value of operations (present value of all cash flow)?
Dozier Corporation is a fast-growing supplier of office products. Analysts project the following FCF during the next 3 years, after which FCF is expected grow at a constant 8 percent. Dozier’s WACC = 13%. Time YEAR 1 2 3 4 FCF (million) 20 30 40 8% growth 1. What is Dozier’s terminal, or horizon value (value of operation at time 3 for constant part)? 2. What is the current value of operations (present value of all cash flow)?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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- Dozier Corporation is a fast-growing supplier of office products. Analysts project the following FCF during the next 3 years, after which FCF is expected grow at a constant 8 percent. Dozier’s WACC = 13%.
Time YEAR 1 2 3 4
FCF (million) 20 30 40 8% growth
1. What is Dozier’s terminal, or horizon value (value of operation at time 3 for constant part)?
2. What is the current value of operations (present value of all cash flow)?
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