Question
Suppose FCFE = $900,000 for years 1-4 and then is expected to grow at a rate of 3%. Assume ke = 18% market value of
Suppose FCFE = $900,000 for years 1-4 and then is expected to grow at a rate of 3%. Assume ke = 18%
market value of equity =
900,000/(1 + 0.18)^t + [(900,000 x 1.03)/0.18 - 0.03]/(1+0.18)^4
= $2,500,851
I don't know how professor how to that answer can you please help?
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Fundamentals Of Corporate Finance
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
5th Edition
1119795435, 978-1119795438
