Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm's total corporate value, in millions? Do not round intermediate calculations. Year 1 2 3 Free cash flow -$20.00 $48.00 $54.00 O $2,761.58 $2,120.00 $2,705.79 $3,291.58
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm's total corporate value, in millions? Do not round intermediate calculations. Year 1 2 3 Free cash flow -$20.00 $48.00 $54.00 O $2,761.58 $2,120.00 $2,705.79 $3,291.58
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 18P: Free Cash Flow Valuation
Dozier Corporation is a fast-growing supplier of office products. Analysts...
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![Question 33
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has
zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are
expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm's
total corporate value, in millions? Do not round intermediate calculations.
Year
1
2
3
Free cash flow
-$20.00
$48.00
$54.00
O $2,761.58
$2,120.00
$2,705.79
O $3,291.58
$2,789.47](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8bdb2115-39a3-4b83-948f-9ca4d17539c2%2F68cb51c4-b874-42e2-95b3-18ca60a21f8b%2F19sj2g8_processed.png&w=3840&q=75)
Transcribed Image Text:Question 33
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has
zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are
expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm's
total corporate value, in millions? Do not round intermediate calculations.
Year
1
2
3
Free cash flow
-$20.00
$48.00
$54.00
O $2,761.58
$2,120.00
$2,705.79
O $3,291.58
$2,789.47
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