Question
Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be $10 million, but its FCF at
Kinkead Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be $10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 6% forever. If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?
| a. | $184 | |
| b. | $186 | |
| c. | $193 | |
| d. | $211 | |
| e. | $167 |
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Mathematics Of Finance
Authors: Robert Brown, Petr Zima
2nd Edition
0071756051, 9780071756051
