Question
A firms current FCF is $10. The firms FCF is expected to grow at a high annual rate of 10% for 7 years, after which
A firms current FCF is $10. The firms FCF is expected to grow at a high annual rate of 10% for 7 years, after which it will grow at a constant annual rate of 6% forever. Assume that the FCF is realized at the end of each year, and that the firms cost of capital is 18%. Which of the following formulas would you use to compute the terminal value of the firm at the end of Year 7?
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Financial Management In Construction Contracting
Authors: Andrew Ross, Peter Williams
1st Edition
1405125063, 9781405125062
