A company has a free cash flow of $20 million in the current year and is expected to grow at a rate of 5% per year for the next 5 years. After that, the growth rate is expected to slow down to 2% per year indefinitely. The cost of capital for the company is 10%. What is the estimated intrinsic value of the company using the discounted cash flow (DCF) method?

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The detailed answer for the above question is provided below The DCF method is used to estimate the intrinsic value of a company by discounting its ex... View the full answer