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True or False? -- Forecasts for Gadget Corp are shown in the table below. If the free cash flows are expected to grow at a

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True or False? -- Forecasts for Gadget Corp are shown in the table below. If the free cash flows are expected to grow at a constant annual rate of 3.25% after Year 6 and the cost of capital is 9.00%, Gadget Corp is worth more than $21. Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Net Income $4.30 $4.75 $5.00 $6.50 $6.75 $6.00 $ 4.00 $3.00 $4.00 $4.00 $5.25 $5.35 Investment Free Cash Flow $1.30 $0.75 $1.00 $2.00 $1.25 $1.40 True False Abstention

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