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The Joke Shop free cash flows to the firm are expected to be $2 million next year and $8 million the following year. Beginning in
The Joke Shop free cash flows to the firm are expected to be $2 million next year and $8 million the following year. Beginning in year 3, Alpine believes the Joke Shop free cash flows will grow by 4% per year in perpetuity (a heroic assumption). The Joke Shop WACC is 12% (after all, its a risky business). What is the Joke Shop intrinsic value?
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