Question
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. If the weighted average cost of capital is 14% and
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firms total corporate value, in millions?
| Year | 1 | 2 | 3 |
| Free cash flow | -$20.00 | $48.00 | $50.50 |
| a. | $553.65 | |
| b. | $549.04 | |
| c. | $535.20 | |
| d. | $572.11 | |
| e. | $461.38 |
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Finance For Growing Enterprises
Authors: Edward W. Davis, Roger Buckland
1st Edition
1138679941, 978-1138679948
