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A financial analyst has produced the following free cash flow forecast for the MBA Corporation: Year 1 2 3 4 5 Free Cash Flow
A financial analyst has produced the following free cash flow forecast for the MBA Corporation: Year 1 2 3 4 5 Free Cash Flow (FCF) - $180,000 -$190,000 - $99,000 $50,000 $75,000 After year 5, the analyst estimates the FCFS will become stable and grow at 5 percent per year thereafter. The firm uses a 15 percent WACC to evaluate projects with a similar risk. What is your estimation of terminal value? O $78,750 O $125,750 O $356,741 O $787,500 O $862,500
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