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Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero nonoperating assets. If the weighted
Wall Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero nonoperating assets. 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? Do not round intermediate calculations.
Year 1 2 3
Free cash flow -$20.00 $48.00 $50.00
a. $492.77
b. $349.05
c. $394.22
d. $410.65
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