Question
The table below shows the forecast of free cash flows for a firm from year 1 to year 5. Year Year 0 Historical Year 1
The table below shows the forecast of free cash flows for a firm from year 1 to year 5.
| Year | Year 0 Historical | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| FCF | $59,184 | $72,021 | $83,805 | $92,185 | $99,560 |
If the long term growth rate of free cash flow beyond year 5 is equal to 6.27% per year, and the WACC is equal to 11.72%, calculate the enterprise value of the firm today (year 0).
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
12th edition
1285850033, 978-1305480698, 1305480694, 978-0357688236, 978-1285850030
