The following are the projected cash flows to equity and to the firm over the next five

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The following are the projected cash flows to equity and to the firm over the next five years:

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The firm has a cost of equity of 12% and a cost of capital of 9.94%.
Answer the following questions:

a. What is the value of the equity in this firm?

b. What is the value of the firm?

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Investment Valuation Tools And Techniques For Determining The Value Of Any Asset

ISBN: 9781118011522

3rd Edition

Authors: Aswath Damodaran

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Question Posted: May 23, 2024 02:01 AM

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The following are the projected cash flows to equity and to the firm over the next five

Question:

Year CF to Equity Int (1-t) CF to Firm 12345 $ 250.00 $ 90.00 $ 340.00 2 $ 262.50 $ 94.50 $ 357.00 3 $ 275.63 $ 99.23 $ 374.85 4 $ 289.41 $104.19 $ 393.59 5 $ 303.88 $109.40 $ 413.27 $3,946.50 Terminal value (The terminal value is the value of the equity or firm at the end of year 5.) $6,000.00

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Investment Valuation Tools And Techniques For Determining The Value Of Any Asset

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