Question
You are valuing a company today, using the FCF valuation method. The company's most current cash flow is 135 million, and you forecasted the free
You are valuing a company today, using the FCF valuation method. The company's most current cash flow is 135 million, and you forecasted the free cash flows for the next 4 years in the table below. You estimate that the company will grow at the same rate as its industry, 3.5%, after 2021 indefinitely. If the cost of capital is 10%, what is the value of this company?
Year
FCF (Million)
2018
185
2019
215
2020
355
2021
455
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Introduction to Finance Markets Investments and Financial Management
Authors: Melicher Ronald, Norton Edgar
15th edition
9781118800720, 1118492676, 1118800729, 978-1118492673
