Question
Walters inc. has an anticipated next-year free cash flow (FCF) of $10 million. This cash flow is anticipated to grow at an annual rate of
Walters inc. has an anticipated next-year free cash flow (FCF) of $10 million. This cash flow is anticipated to grow at an annual rate of 5%.
a. if the FCFs occur year-end and the WACC of Walters is 15%, what is the enterprise value of the company?
b. How would your answer change if the cash flows occur in mid-year?
Step by Step Solution
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Step: 1
a To calculate the enterprise value of the company we need to discount the anticipated free cash flo...
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
12th edition
1285850033, 978-1305480698, 1305480694, 978-0357688236, 978-1285850030
