An entire company being valued has free cash flows forecasted as shown and a terminal value of
Fantastic news! We've Found the answer you've been seeking!
Question:
An entire company being valued has free cash flows forecasted as shown and a terminal value of $1,000,000. The cost of capital (i.e., the required rate of return) is 10%. If the total value is be determined from discounting the free cash flows and terminal value, and the debt claim against this company has a value of $1,000,000, how much of the total value is equity?
Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
Initial Investment | $200,000 | $300,000 | $350,000 | $375,000 | $400,000 |
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date: