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Present value of a firm using discounted growth model. A firm has Free Cash Flow in year 1 of $2.5 million and year 2 or

Present value of a firm using discounted growth model.

  • A firm has Free Cash Flow in year 1 of $2.5 million and year 2 or $2.6 million
  • Assume an 8% interim Free Cash Flow growth rate for each of the years 3 5
  • Cost of Capital is 12%
  • Assume a 3% growth rate for Continuing Value

Find the value of the firm using this given information.

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