Question
ABC Corp. earned $985,000 in free cash flow (FCF) this year. Management projects that the firms FCFs will grow by 4.0% per annum indefinitely. If
ABC Corp. earned $985,000 in free cash flow (FCF) this year. Management projects that the firms FCFs will grow by 4.0% per annum indefinitely. If Walshs weighted average cost of capital (WACC) is 11%, what is your estimate of the intrinsic value of the company using:
a. Constant Growth Model (Terminal Value)
Please show your work!
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Investments
Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey
6th Edition
8120321014, 978-8120321014
