=+LG 5 ST72 Free cash flow valuation Erwin Footwear wishes to assess the value of its Active

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=+LG 5 ST7–2 Free cash flow valuation Erwin Footwear wishes to assess the value of its Active Shoe Division. This division has debt with a market value of $12,500,000 and no preferred stock. Its weighted average cost of capital is 10%. The Active Shoe Division’s estimated free cash flow each year from 2020 through 2023 is given in the following table. Beyond 2023 to infinity, the firm expects its free cash flow to grow at 4% annually.

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Principles Of Managerial Finance

ISBN: 9781292261515

15th Global Edition

Authors: Chad J. Zutter, Scott Smart

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