Derek Inc. forecasts that it will have the free cash flows (in millions) shown below. Assume the firm has zero non-operating assets. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3, what is the firm’s total corporate value, in millions?  

Answer rating: 100% (QA)

Year 1 cash flow 2000 Year 2 cash flow 4800 Year 3 cash flow 5050 growth from 2 to 3 years is g50... View the full answer