Juicers Inc. is thinking of acquiring Fast Fruit Company. Fast Fruit currently has no debt outstanding. Juicers expects Fast Fruit's FCF t be $9 million in the first year, and $15 million in the second year. After the second year, the free cash flows will grow at a constant rat of 4%. Fast Fruit's cost of equity is 9%. What is the value of Fast Fruit?

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Juicers Inc. is thinking of acquiring Fast Fruit Company. Fast Fruit currently has no debt outstanding. Juicers expects Fast Fruit's FCF to
be $9 million in the first year, and $15 million in the second year. After the second year, the free cash flows will grow at a constant rate
of 4%. Fast Fruit's cost of equity is 9%. What is the value of Fast Fruit?
$196.3 million
$283.5 million
$235.5 million
$215.9 million
Transcribed Image Text:Juicers Inc. is thinking of acquiring Fast Fruit Company. Fast Fruit currently has no debt outstanding. Juicers expects Fast Fruit's FCF to be $9 million in the first year, and $15 million in the second year. After the second year, the free cash flows will grow at a constant rate of 4%. Fast Fruit's cost of equity is 9%. What is the value of Fast Fruit? $196.3 million $283.5 million $235.5 million $215.9 million
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