Zhdanov, Inc. forecasts that its free cash flow in the coming year, i.e., at t-1, will...
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Zhdanov, Inc. forecasts that its free cash flow in the coming year, i.e., at t-1, will be -$15 million (negative), but its FCF at t-2 will be $30 million. After Year 2, FCF is expected to grow at a constant rate of 3% forever. If the weighted average cost of capital is 18%, what is the firm's value of operations, in millions? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box. Zhdanov, Inc. forecasts that its free cash flow in the coming year, i.e., at t-1, will be -$15 million (negative), but its FCF at t-2 will be $30 million. After Year 2, FCF is expected to grow at a constant rate of 3% forever. If the weighted average cost of capital is 18%, what is the firm's value of operations, in millions? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
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Answer rating: 100% (QA)
To calculate the value of operations for Zhdanov Inc we can use the discounted cash flow DCF valuati... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0133400694
1st canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
Posted Date:
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