Question
Heritage Parts is undergoing a restructuring, and its free cash flows are expected to be unstable during the next few years. However, FCF is expected
Heritage Parts is undergoing a restructuring, and its free cash flows are expected to be unstable during the next few years. However, FCF is expected to be $40 million in Year 5, i.e., FCF at t = 5 equals $40 million, and the FCF growth rate is expected to be constant at 6% beyond that point. If the weighted average cost of capital is 12%, what is the horizon value (in millions) at t = 6?
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Principles of Operations Management Sustainability and Supply Chain Management
Authors: Jay Heizer, Barry Render, Chuck Munson
10th edition
978-0134183954, 134183959, 134181980, 978-0134181981
