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The following are the projected cash flows to the firm over the next five years: Year Cash Flows to the Firm (Million) 1 $120 2

The following are the projected cash flows to the firm over the next five years:

Year Cash Flows to the Firm (Million)
1 $120
2 $145
3 $180
4 $197
5 $232

The firm has a cost of capital (WACC ) of 11% and the cash flows are expected to grow at the rate of 3.5% in perpetuity?

a) At what growth rate will the firm have a value of $3000 Million? - explain/show work on how this is calculated.

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