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
Related questions
Question
Transcribed Image Text:2. Assume that today is December 31, 2021 and you need to determine the firm value of
CoolTech, Inc. You have decided to apply the free cash flow valuation model to the firm's
financial data that you've developed from a variety of data sources. The key values you have
compiled are summarized in the following table:
Free Cash Flow
Year
FCF
Other Data
Growth rate of FCF, beyond 2025 to infinity = 3%
Weighted average cost of capital = 8%
700,000
800,000
950,000
980,000
2022
%3D
2023
%3D
2024
2025
What is the value of the entire CoolTech's entire company?
+ Factac F%
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