Question
The following table presents forecasted financial information for Financial Advisors Co.: 2019 2020 2021 Projected EBIT $319 $347 $365 Earnings after tax $127 $217 $285
The following table presents forecasted financial information for Financial Advisors Co.: 2019 2020 2021 Projected EBIT $319 $347 $365 Earnings after tax $127 $217 $285 Free cash flow $109 $144 $152
Financial Advisors Co.s WACC = 9% Expected growth rate in FCFs from 2021 to infinity is perpetually 5% Price/Earnings ratio is 12
What is an appropriate estimate of the companys terminal value as of the end of 2018, using the perpetual-growth equation as your estimate?
NOTE: Please show the work in order for me to understand
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
13th Edition
1337395080, 9781337395083
