Question
Assume you are conducting a discounted cash flow valuation of Family Health Associates. You have assembled the following financial information (all numbers are in millions).
Assume you are conducting a discounted cash flow valuation of Family Health Associates. You have assembled the following financial information (all numbers are in millions). The after tax-cost of debt is 7 percent, the cost of equity is 19 percent, and the weighted average cost of capital is 14.2 percent. Year 1 Year 2 Year 3 Year 4 Net profit $3.0 $3.2 $4.0 $5.2 Depreciation 6.0 6.0 7.0 7.0 Equity retentions 3.0 4.0 5.0 6.0 Terminal value 60.0 What is the estimated value of Family Health Associates? $45.3 million $65.6 million $52.2 million $67.9 million $77.4 million
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