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

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

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D 30940705 million Therefore the current total firm value is 30940693 Hence Option D is correct the ... View full answer

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