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15. Analysts often value companies by forecasting a series of cash flows and then estimating a horizon value. Suppose a firm forecasts cash flows (in
15. Analysts often value companies by forecasting a series of cash flows and then estimating a horizon value. Suppose a firm forecasts cash flows (in $millions. in years I through 4 as $120, $130, $135, and $137, respectively. If the project grows thereafter at 3% annually and the discount rate is 10%, what is the firm's horizon value at t=4? A. $2,016 B. $1,756 c. $1,377 D. $953 E. $141
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