Question
A company is projected to generate free cash flows of $136 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the
A company is projected to generate free cash flows of $136 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 2.5% rate in perpetuity. The company's cost of capital is 8.8%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place (e.g., $213,456,789 = 213.5).
Step by Step Solution
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Step: 1
To estimate the enterprise value we can use the discounted cash flow DCF approach where we discount ...
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
9th Edition
73530700, 978-0073530703
