Question
If you have an estimate of a firm's current free cash flows (FFCF) and want to estimate its value as perpetuity with an expected growth
If you have an estimate of a firm's current free cash flows (FFCF) and want to estimate its value as perpetuity with an expected growth rate of 3%, given that your required rate of return is 10%, What is the implied capitalization rate?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
The implied capitalization rate in this scenario is 7 Heres how we can arrive at the answer The perp...
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Financial Management Theory and Practice
Authors: Eugene F. Brigham, Michael C. Ehrhardt
15th edition
130563229X, 978-1305632301, 1305632303, 978-0357685877, 978-1305886902, 1305886909, 978-1305632295
