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A firm has constant cash flows of $7k for 2 years and after that it is assumed that its cash flows will grow at a
A firm has constant cash flows of $7k for 2 years and after that it is assumed that its cash flows will grow at a rate of 3% per year forever. The cost of capital is 10%. What is the value of the firm?
Answer is 97K.
Please show your work, and label your acronyms (e.g. PV = present value).
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