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You are valuing the operating assets of Bloom Inc. based on the following assumptions: During the high growth period of n years, the firm has

You are valuing the operating assets of Bloom Inc. based on the following assumptions:

During the high growth period of n years, the firm has a ROIC of 15% and a NOPAT growth rate of 8%.

In the stable growth period, the firm has a RONIC of x% and a constant growth rate of 2%.

The WACC is 10% and tax rate is 25%. EBIT in Year 0 was $100 million.

Based on the above, you have valued the operating assets at $928.637 million (the Total Value). The PV of the terminal value accounts for 75.468% of the Total Value.

(a) What is the length of the high growth period n? (1.5 points)

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