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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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