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Hello, kindly help me solve this problem about the Cashflow from operations. Brooks Enterprises never paid dividends. It plans a free cash flow of $
Hello, kindly help me solve this problem about the Cashflow from operations.
Brooks Enterprises never paid dividends. It plans a free cash flow of $ 80,000 and $ 100,000 in the next two years, respectively; after the second year, it is planning to grow at a constant rate of 8%. The weighted average cost of capital is 12%.
- What is the continuing value of the operations? (Hint: Determine the value of the cash flows after year 2, discounted to that year.)
- Calculate the value of the operations.
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