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You have to value a company based on its expected future cash flows. Interest rates are currently 12%. If this company expects cash flow of
You have to value a company based on its expected future cash flows. Interest rates are currently 12%. If this company expects cash flow of $100,000,000 next year (it is the end of year 0 or equivalently the beginning of the first year), growing at 10% each year until the end of the fifth year. Then, cash flow growth is expected to slow to 3.4 forever-after. What is the value of this company today, in thousands of dollars?
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