Hi,

I am actually working on a HBS (Nextel Peru). The whole case seems to be basically about determining FCFs and then discount them to value a company. I will use RRR to discount the FCFs. As the RRR is defined as = +()+( ).

I forecast FCFs over next 5 years using the industry median (is median or average better by the way?) growth rate in revenue and median margin of FCF. However for the terminal value, I am struggling to define the long-term growth rate.

The acquired company is Peruvian, as the case mentions GDP growth in Peru for next two years between 6 and 6.5% (before the 5 years forecasted then) or long-term expected growth rate of 3% in US.

Thanks a lot,

Gaspar

You

a few seconds ago

Since the case says that once the company acquired its performance should mirror the companies and industry as well as reflect the Peruvian's economy. Is it reasonable to assume a long-term growth rate similar to the GDP growth rate of Peru. For instance, 5% long-term growth rate in order not to overestimate the results either? thank you