JenBritt Incorporated projects FCF of $285 million in 2020 and $520 million in 2021. FCF is expected to grow at a constant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
JenBritt Incorporated projects FCF of $285 million in 2020 and $520 million in 2021. FCF is expected to grow at a constant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
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
Problem 1PS
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JenBritt Incorporated projects FCF of $285 million in 2020 and $520 million in 2021. FCF is expected to grow at a constant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
Do not round intermediate calculations. Enter your answer in millions WITHOUT comma or separator. For example, an answer of $1 million should be entered as 1, not 1,000,000. Round your answer to two decimal places.
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