Lex Cop is expected to generate a free cash flow (FCF) of $11,275.00 million this year (FCF1

Question:

Lex Cop is expected to generate a free cash flow (FCF) of $11,275.00 million this year (FCF1 = $11,275.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF2 and FCF3) After the third year, however the FCF is expected to grow at a constant rate of 2.46% per year, which will last forever (FCF4) IF Lex Corp weighted average cost of capital (WACC) is 7.38% what is the current total firm value of Lex Corp?

a. 371,288.46 million

b. 374,656.88 million

c. 35,410.74 million

d. 309,407.05 million

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Free Cash Flow
Free cash flow (FCF) represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. Unlike earnings or net income, free cash flow is a measure of profitability that excludes the...