Discounted cash flows valuation model. Smoothtone Products manufactures sound systems. The company's weighted average cost of capital is 15 percent. The company forecasted the following free cash flows for the next 20 years.

Use the discounted cash flow approach to value the Smoothtone Products Company.

Transcribed Image Text:

Year 1 2 Free Cash Flows $10,000,000 15,000,000 3 20,000,000 4 5 6-10 22,000,000 25,000,000 20.000.000 per year 11-20 15,000,000 per year