Question
Mark's Shoes store forecasts a free cash flow of $40 million in Year 3, i.e., at t = 3, and it expects FCF to grow
Mark's Shoes store forecasts a free cash flow of $40 million in Year 3, i.e., at t = 3, and it expects FCF to grow at a constant rate of 6% thereafter. If the weighted average cost of capital is 10% and the cost of equity is 15%, what is the horizon value, in millions at t = 3?
| a. | $840 | |
| b. | $972 | |
| c. | $1,021 | |
| d. | $693 | |
| e. | $1060 |
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Mathematics Of Finance
Authors: Robert Brown, Petr Zima
2nd Edition
0071756051, 9780071756051
