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Grand Rapids, Inc. FCF o = 53,571 FCF grows at a constant rate = 5.0% WACC = 12.50% S.T. Investments = 150,006 L.T. Debt =

Grand Rapids, Inc.

  • FCFo = 53,571
  • FCF grows at a constant rate = 5.0%
  • WACC = 12.50%
  • S.T. Investments = 150,006
  • L.T. Debt = 300,000

Question: What is the Value of Equity of Grand rapids?

VOP = FCF1 (WACC gL)

VTotal = VOP + S.T. Investments

VEquity = VTot Debts

P0 = VEquity N

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