Question
You are given the following forecasted information for year 2014: sales = $550,000,000, operating profit (OP) = 7.7%, capital requirements (CR) = 35%, growth (g)
You are given the following forecasted information for year 2014: sales = $550,000,000, operating profit (OP) = 7.7%, capital requirements (CR) = 35%, growth (g) = 4%, and the weighted average cost of capital (WACC) = 10.8%.If these values remain constant, what is the horizon value (i.e., the 2014 value of operations)?
a. Vop = $192,500,000
b. Vop = $550,000,000
c. Vop = $534,471,882.40
d. Vop = $228,931.400.65
e. VOP = $534,470,588.20
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
