Question
1. You are trying to determine the intrinsic value of firm A using the free cash flow method. The free cash flow of the company
1. You are trying to determine the intrinsic value of firm A using the free cash flow method. The free cash flow of the company today is at $1000 and you forecast that the growth rate of the free cash flow will be 20% for the next 2 years. You determine a comparable company has a Price/EBITA ratio of 15. Given the information and the 2 year forecast period, what is your forecasted terminal value of firm A?
A. 15000
B. 25600
C. 1440
D. 21600
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Finance For Housing An Introduction
Authors: Cathy Davis
1st Edition
1447306481, 978-1447306481
