You are valuing the equity of a company using the FCFE approach and have estimated that the

Question:

You are valuing the equity of a company using the FCFE approach and have estimated that the FCFE in the next five years will be $6.05, $6.76, $7.36, $7.85, and $8.15 million, respectively. Beginning in year 6, you expect the cash flows to increase at a rate of 2 percent per year for the indefinite future. You estimate that the cost of equity is 12 percent. What is the value of equity in this company?

Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...