Question
Janicek Corp. is a private company experiencing rapid growth. Free cash flows are expected to grow at 20% per year during the next two
Janicek Corp. is a private company experiencing rapid growth. Free cash flows are expected to grow at 20% per year during the next two years, and then 2% per year, indefinitely. In the fiscal year just ended (year 0), its free cash flow is 5 millions. The cost of capital for this firm is 15% in the first two years and 12% thereafter. What is the terminal value of this firm in two years? What is the value of this firm?
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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
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