Estimate the value of Runner's MVIC (the entire firm) using a multiperiod discounted cash flow model and
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Runner's Corporation Company Data
Long-term market return: 11.45%
ERP: 6.48%
Beta: 1.0935
Cost of Equity: 9.5866%
Free cash flow to the firm (FCFF) last year: 100,000
Expected annual growth in FCFF for next 4 years: 12.00%
Timing of cash flows received during the year: End of the year
Expected annual growth in FCFF after 4 years (starting in year 5):3.00%
Debt capital as of today $1,000,000
Cost of debt, Rd: 5.00%
Corporate tax rate, Tc: 30.00%
Risk-free rate, Rf as of valuation date: 2.50%
WACC:?
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
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