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Free cash flow valuation You are evaluating the potential purchase of a small business with no debt or preferred stock that is currently generating $
Free cash flow valuation You are evaluating the potential purchase of a small business with no debt or
preferred stock that is currently generating $ of free cash flow $ On the basis of a
review of similarrisk investment opportunites, you must earn an rate of return on the proposed
purchase. Because you are relatively uncertain about future cash flows, you decide to estimate the firm's value
using several possible assumptions about the growth rate of cash flows.
a What is the firm's value if cash flows are expected to grow at an annual rate of from now to infinity?
b What is the firm's value if cash flows are expected to grow at a constant annual rate of from now
to infinity?
c What is the firm's value if cash flows are expected to grow at an annual rate of for the first years,
followed by a constant annual rate of from year to infinity?
a The firm's value, if cash flows are expected to grow at an annual rate of from now to infinity, is $
Round to the nearest cent. plz answer AC AS THEY ARE QUESTION PLZZ
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