uation of companies can be done by forecasting a series of cash flows and then estimating a horizon value. Your firm projects net cash flow in years 1 through 5 as follows: Year 1 Year 2 Year 3 Year 4 Year 5 100 Million $ 120 Million $ 135 Million $ 140 Million $ 147 Million $ Assume that the company is expecting a growth rate of 6% starting year 5 and a discount rate of 12%; compute the PV of the company? Show the details of all your calculations.
uation of companies can be done by forecasting a series of cash flows and then estimating a horizon value. Your firm projects net cash flow in years 1 through 5 as follows: Year 1 Year 2 Year 3 Year 4 Year 5 100 Million $ 120 Million $ 135 Million $ 140 Million $ 147 Million $ Assume that the company is expecting a growth rate of 6% starting year 5 and a discount rate of 12%; compute the PV of the company? Show the details of all your calculations.
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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Valuation of companies can be done by forecasting a series of cash flows and then estimating a horizon value.
Your firm projects net cash flow in years 1 through 5 as follows:
Year 1
Year 2
Year 3
Year 4
Year 5
100 Million $
120 Million $
135 Million $
140 Million $
147 Million $
Assume that the company is expecting a growth rate of 6% starting year 5 and a discount rate of 12%; compute the PV of the company?
Show the details of all your calculations.
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