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Suppose a firm is expecting $100m in free cash flow in one year. For the subsequent 4 years they expect free cash flows to grow
Suppose a firm is expecting $100m in free cash flow in one year. For the subsequent 4 years they expect free cash flows to grow at 5% per year. Following the 5th year they expect FCF to level off at $150m for the rest of the life of the firm. What is the value of the firm if you assess a 13% discount rate for the firm's cashflows? What is the price per share if there are 75 million shares outstanding?
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