Question
Richter Manufacturing has a 7% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant
Richter Manufacturing has a 7% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant 2% rate after Year 3.
| Year 1 | Year 2 | Year 3 | |
| FCF | $720 | $755 | $815 |
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What is the horizon value of the unlevered operations? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
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What is the total value of unlevered operations at Year 0? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
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Finance For Non Financial Managers
Authors: Pierre G. Bergeron
5th Edition
0176104070, 9780176104078
