Question
XYZ Corp will generate operating cash flow of $120,000next year and this is expected to grow at 1% per year indefinitely. XYZ also just started
XYZ Corp will generate operating cash flow of $120,000next year and this is expected to grow at 1% per year indefinitely.
XYZ also just started a new project that will require a cash flow of-$200,000 right now (at t=0). In year 1, it will generate $40,000 in revenue which will grow at 3% per year indefinitely.
If the discount rate is 15%, what is the total equity value of XYZ Corp?
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
6th edition
1305968352, 978-1337635653, 978-1305968356
