Question
Computing Present Value of Terminal Period FCFF Use the following data to compute the present value of the terminal period free cash flows to the
Computing Present Value of Terminal Period FCFF
Use the following data to compute the present value of the terminal period free cash flows to the firm for each of the four firms A, B, C, and D. The forecast horizon included four years.
| A | B | C | D | |||||
|---|---|---|---|---|---|---|---|---|
| Terminal period free cash flow to the firm (FCFF) | $72,670 | $16,813 | $101,517 | $44,672 | ||||
| WACC | 5.0% | 6.2% | 4.3% | 11.0% | ||||
| Terminal period growth rate | 1.0% | 1.0% | 2.0% | 1.5% |
Round answers to the nearest whole number.
| A | B | C | D | |||||
|---|---|---|---|---|---|---|---|---|
| Present value of terminal cash flows |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Public Finance
Authors: Richard W. Tresch
3rd Edition
012415834X, 9780124158344
