Question
19.Good Guys Auto is expected to generate the following free cash flow over the next few years: Time 012345 ($millions)$0$50 $60 $80 $70 $70.... and
19.Good Guys Auto is expected to generate the following free cash flow over the next few years:
Time012345
($millions)$0$50 $60 $80 $70 $70....
and then from years 5 onward the cash flows will be a constant $70 million each year. The discount rate is 10%.The company has no excess cash and $250 million in debt and 40 million shares outstanding.What is its enterprise value?
A.$10.94 million
B.$387.6 million
C.$700.0 million
D.$681.1 million
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
11th edition
978-1111530266
