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6. Tulip Inc. has forecasted that its free cash flow three years from now, FCF 3 , will be $20 million. After three years, free
6. Tulip Inc. has forecasted that its free cash flow three years from now, FCF3, will be $20 million. After three years, free cash flow is expected to grow at a constant rate of 3%. The required return on common stock rcs, is 14.2% and the WACC is 11.80%. What is the present value of Tulips horizon value, V3?
a. $123.5 million
b. $147.8 million
c. $167.5 million
d. $174.3 million
e. $234.09
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