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Graded Assignment Year Free Cash Flow 1 $ (120,000) 2 $ (80,000) 3 $ 120,000 4 $ 120,000 5 $ 120,000 6 $ 120,000 7
| Graded Assignment | ||||||||
| Year | Free Cash Flow | |||||||
| 1 | $ (120,000) | |||||||
| 2 | $ (80,000) | |||||||
| 3 | $ 120,000 | |||||||
| 4 | $ 120,000 | |||||||
| 5 | $ 120,000 | |||||||
| 6 | $ 120,000 | |||||||
| 7 | $ 120,000 | |||||||
| 8 | $ 120,000 | |||||||
| 2880000 | ||||||||
| Discount | 30% | |||||||
| Growth | 10% | |||||||
| New Investor | $200,000 |
| 1. What is the present value (PV = Price) of the business above |
| 2. What % of the firm's value is the investor claiming? |
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Investments An Introduction
Authors: Herbert B. Mayo
13th Edition
0357127951, 978-0357127957
