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 $50.50 a. $553.65 b. $461.38 c. $535.20 d. $572.11
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 $50.50 a. $553.65 b. $461.38 c. $535.20 d. $572.11
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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- Wall Inc.
forecasts that it will have thefree 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.
Transcribed Image Text: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
$50.50
a. $553.65
b. $461.38
c. $535.20
d. $572.11
e. $549.04
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