Question
A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012.
| A financial analyst from Raymond James made the following forecast for Hi-tech Firm TGI between 2013-2015 (in millions of dollars) at the end of 2012.
Raymond James expects a constant growth of 8% in Cash Flow from operations after 2015. However, Raymond James is expecting uneven above-average growth in Investments. Specifically, TGI is expected to have an initial six-year period of 9% per year growth after 2015. Analysts anticipates that TGI will increase its investments 5% per year as a mature company, and allows 10 years for the transition to the mature growth period. TGI reported $4,400 in short-term and long-term debt and 450 million shares outstanding at the end of 2012. (WACC=11%). Which of the following options is closest to the present value in the year 2012 of free cash flow from 2021 onwards? 1,006.99 4,712.27 7,458.97 12,171.24 Which of the following options is closest to the present value in the year 2012 of free cash flow from 2016 to 2021? 7,458.97 253.19 753.81 1,006.99 | |||||||||||||
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
