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Terminal Value In Class Problem Firm B is considering the acquisition of Firm Y. Firm B has estimated the cash flows, cost of capital and

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Terminal Value In Class Problem Firm B is considering the acquisition of Firm Y. Firm B has estimated the cash flows, cost of capital and growth rate for firm Y shown below. Using these estimates, estimate the current value of firm Y using the terminal value technique. Year 1 9900 Year 2 $1,115 Year 3 $1.240 Year 4 $1,450 CFF WACC -11%, -2% (assumed constant following year 4). Check Answers: TV4 = $16,433, Firm Y Estimated Value = $14,403

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