A company currently has $200 million in debt (market value) and forecasts the free cash flows (in
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A company currently has $200 million in debt (market value) and forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 10% and the free cash flows are expected to grow at a rate of 3% after Year 2, what is the market value, in millions, of the company’s equity?
Year 1 FCF: -150$
Year 2 FCF: 100$
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
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