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Suppose your company's WACC =12% and you know that the free cash flow of your company next year is going to be FCF1=$13.85 and then
Suppose your company's WACC =12% and you know that the free cash flow of your company next year is going to be FCF1=$13.85 and then FCF is expected to grow at 6%. Then the FCF2 is and the company's horizon value in one year is . This means that the firm's value today is Now it's time for you to practice what you've learned. The following table shows projected free cash flows for the next four years for Quick Sky Corp., a company producing wind turbines. After the four year period, Quick Sky is expected to grow at a constant rate of 6% and its WACC is 12%. Quick Sky has $20 million of debt and $180 million shares of stock outstanding. Quick Sky's value today is million and the price per share today is
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