A company in US is acquiring a company in UK, and the US company is attempting to value the UK company in USD. After repatriation, taxes and country-related risks are taken into consideration, the free cash flow forecasts of the UK company for the next three years, states in GBP, are 20 million, 30 million and 40 million, respectively, and the company is expected to grow at a long term growth rate of 3% going forward. The appropriate risk-adjusted discount rate for the comparable companies in US is 10% and remains constant for all years. Both companies are only financed with common equity.

Use the information as shown in the tables below and DCF model to estimate the value of the UK target company under both the Decentralized and Centralized Approaches.

Rf	Year 0	Year 0
	US	UK
Yield on 5-yr government bond	2.04%	0.77%
Yield on 30-yr government bond	2.82%	1.89%

	Spot Rate	Forward Mid-Rate	Forward Mid-Rate	Forward Mid-Rate	Forward Mid-Rate
	Year 0	Year 1	Year 2	Year 3	Year 4
USD/GBP	1.63	1.62	1.62	1.61	1.60