Consider a company that is projected to generate revenues of $460 million next year. Analysts expect revenues to grow at a 6.2% annual rate for the following two years (until the end of year 3) and then at a stable rate of 1.7% in perpetuity. If the company is expected to have a gross margin of 75%, operating margin of 43%, net margin of 25%, tax rate of 19.6%%, and reinvestment rate of 62%.

What is its expected free cash flows in four years from today?

Answer rating: 100% (QA)

To calculate the expected free cash flows in four years from today we need to follow these steps Step 1 Calculate the projected revenues for each year ... View the full answer