Firm Valuation The ABC plc statement of cash flows for the latest financial year is given below. The appropriate discount and growth rates are 14 per cent and 4 per cent, respectively. Assume the marginal corporate tax rate is 23 per cent. What is the value of the firm?

Year Ended 31 March £m Notes 2011 Net cash flows, from operating activities Cash generated from (used in) operations 611.6 Interest paid (234.0)
Purchase of interest rate caps –
Interest received 1.9 Corporate income tax (paid) refunded (24.6)
Net cash generated from operating activities 354.9 Cash flows from investing activities Acquisition of subsidiary undertakings, net of cash acquired 23 (12.8)
Increased investment in subsidiary undertakings –
Purchase of property, plant and equipment and software (77.4)
Loans made to Group companies –
Net cash used in investing activities (90.2)
Free cash flow 264.7 Cash flows from financing activities Net proceeds from share issues 0.8 Purchase of own shares (0.2)
Treasury shares sold by trust –
Repayment of borrowings (216.5)
Net payments on revolving and short-term credit facilities (6.6)
Financing fees paid (0.4)
Net cash (used in) generated from financing activities (222.9)
Net increase (decrease) in cash and cash equivalents 41.8 Cash and cash equivalents at beginning of the year 160.4 Exchange losses on cash and cash equivalents (1.7)
Cash and cash equivalents at year end 200.5