Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 16, 2024

You are trying to determine the intrinsic value of firm A using the free cash flow method. The free cash flow of the company today

You are trying to determine the intrinsic value of firm A using the free cash flow method. The free cash flow of the company today is at $1000 and you forecast that the growth rate of the free cash flow will be 20% for the next 2 years. You determine a comparable company has a Price/EBITA ratio of 15. Given the information and the 2 year forecast period, what is your forecasted terminal value of firm A? A. 15000 B.21600 C.25600 D. 1440

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Reporting and Analysis

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

2nd edition

978-1285453828

Students also viewed these Finance questions

Question

=+We want a regression model to predict USGross. Parts of the regression output computed in Excel look like this: Dependent variable is: USGross($) R squared = 47.4% R squared (adjusted) = 46.0% s =...

Answered: 1 week ago

Question

★★★★★

Atlantic Academy is a private school that offers education to children from Kindergarten to Grade 7. The school operates as a not-for-profit entity and oversight of the school is performed by the...

Answered: 1 week ago

Question

★★★★★

Carla borrowed $ 1 0 4 9 . 0 0 from the Central Bank at 8 . 5 % per annum calculated on the monthly unpaid balance. She agreed to repay the loan in blended payments of $ 2 1 9 . 0 0 per month....

Answered: 1 week ago

Question

★★★★★

This is, in essence, the idea behind "Three Degrees of Humanities 30." I want you to think about and appreciate the way people/things/ideas connect. For each of the five Three Degrees of Humanities 30

Answered: 1 week ago

Question

★★★★★

Post an explanation of how identity, privilege, power, and oppression influence professional practice based on Janet Helms's explanation in the Microtraining Associates video. Then explain the...

Answered: 1 week ago

Question

★★★★★

VWX Inc., has sales of $500,000, net income of $80,000, dividend payout of 50%, total assets of $700,000 and target debt-equity ratio of 1.5. If the company grows at its sustainable growth rate in...

Answered: 1 week ago

Question

★★★★★

Because a mother does not want to "spoil" her new born baby. She feeds and takes care of her baby's physical needs when she thinks the baby needs care, not when the baby cries to indicate their...

Answered: 1 week ago

Question

★★★★★

Application of Core Conflictual Relationship Theme (CCRT) Therapy to counselling immigrants and refugees Evidence understanding of applying a contemporary psychodynamic theory which can be modified...

Answered: 1 week ago

Question

★★★★★

Which of the following features of "There Will Come Soft Rains" does not reflect postmodernism? A . Its pastiche characteristics and blending of genres: elements of satire, speculative fiction,...

Answered: 1 week ago

Previous Question Next Question