Question
It is December 2020. Google has offered to buy your internet startup. The Google negotiators and you both agree on the following expectations. Year Expected
It is December 2020. Google has offered to buy your internet startup. The Google negotiators and you both agree on the following expectations.
| Year | Expected Free Cash Flow To Firm |
| 2021 | 120,000 |
| 2022 | 180,000 |
| 2023 | 270,000 |
| 2024 | 360,000 |
| 2025 | 450,000 |
After 2025, cash flows are expected to grow by 3% per year. Based on the riskiness of your industry, you think that your weighted average cost of capital is 13%.
What is the total value of the company?
| A. | $3,415,014 | |
| B. | $2,784,305 | |
| C. | $4,635,000 | |
| D. | $3,762,180 |
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J Hughes
9th Edition
0073382329, 9780073382326
