Question
Lex Corp. is expected to generate a free cash flow (FCF) of $13,820.00 million this year (FCF = $13,820.00 million), and the FCF is expected
Lex Corp. is expected to generate a free cash flow (FCF) of $13,820.00 million this year (FCF = $13,820.00 million), and the FCF is expected to grow at a rate of 22.60% over the following two years (FCF and FCF). After the third year, however, the FCF is expected to grow at a constant rate of 3.18% per year, which will last forever (FCF). Assume the firm has no nonoperating assets. If Lex Corp.s weighted average cost of capital (WACC) is 9.54%, what is the current total firm value of Lex Corp.? (Note: Round all intermediate calculations to two decimal places.)
$358,723.16 million
$42,541.14 million
$379,539.25 million
$298,935.97 million
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ANSWER CHOICE IS CORRECT. PROFESSOR COMFIRMED THE ANSWER IS $298.935.97
YALL DO NOT KNOW WHAT YOU ARE DOING
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