ABC Corporations cash flow from operations before interest and taxes was $3 million It expects that this will grow by 6% per year forever. To make this happen, the firm will have to invest an amount equal to 22% of pretax cash flow each year. ABCs tax rate is 21%. Depreciation was $250,000 in the year just ended and is expected to grow at the same rate as the operating cash flow. The appropriate market capitalization rate for the unleveraged cash flow is 14% per year, and the firm currently has debt of $5 million outstanding. Use the free cash flow approach to value the firms equity!?

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