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If the firms expected future free cash flows in year 1 is $1.2 million, in year 2 it is expected to equal $1.6 million, in
If the firms expected future free cash flows in year 1 is $1.2 million, in year 2 it is expected to equal $1.6 million, in year 3 it is expected to equal $2.0 million and then the expected future free cash flows are expected to increase at a constant rate of 3%/year into perpetuity. Assume the firms WACC is 8%/year. Provide an equation, including all of the inputs, to calculate the present value of the expected future free cash flows of this firm.
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