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You are the CFO of Brutus Co. and expect your firm to generate FCFs of $450,000 per year (starting next year) for 10 years.
You are the CFO of Brutus Co. and expect your firm to generate FCFs of $450,000 per year (starting next year) for 10 years. After that, annual FCFS will grow by 1% per year forever. Therefore, FCF in year 11 would be higher than FCF in year 10, FCF in year 12 would be higher than year 11, and so on. You expect a cost of capital of 6% for Brutus Co. How much would you value Brutus Co.?
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To value Brutus Co we can use the discounted cash flow DCF method by calculating the present value o...
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
