Question
A company forecasts free cash flow in one year to be -$10 million and free cash flow in two years to be $20 million. After
A company forecasts free cash flow in one year to be -$10 million and free cash flow in two years to be $20 million. After the second year, free cash flow will grow at a constant rate of 4% per year forever. The value of the firm's non-operating assets is $30 million. If the overall cost of capital is 14%, what's the firm's total value?
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International Financial Management
Authors: Jeff Madura
2nd Edition
0314430296, 978-0314430298
