The free cash flow to a public company is $8 million, the growth of operating income is
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The free cash flow to a public company is $8 million, the growth of operating income is 4 percent for the next five years, and the stable investment rate is 21 percent. If the firm is projected to grow at a stable rate of 4 percent for the next five years, with a cost of capital of 5 percent and terminal growth of 1. 5 percent, estimate the present value of the firm for a law firm. What are the potential problems with your estimate? Is the terminal growth rate modest? Why?
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Estimating the Present Value of the Firm Based on the information provided we can estimate the present value of the firm using the Discounted Cash Flo...View the full answer
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Related Book For 
Economic Analysis And Law The Economics Of The Courtroom
ISBN: 247146
1st Edition
Authors: Christopher E.S. Warburton
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