Question 7 (2 points)

A firm expects to generate $100 million in free cash flow in a year. This free cash flow is expected to grow at a constant annual rate of 5%. The firm has a 16% cost of capital, $251 million of debt, and 20 million shares of common stock outstanding.

Compute the value of the firm. (show your answers in millions - example, $10,000,000 would be entered as 10)

Your Answer:

Question 7 options:

Answer