Question: Hello, kindly help me solve this problem about the Cashflow from operations. Brooks Enterprises never paid dividends. It plans a free cash flow of $

Hello, kindly help me solve this problem about the Cashflow from operations.


Brooks Enterprises never paid dividends. It plans a free cash flow of $ 80,000 and $ 100,000 in the next two years, respectively; after the second year, it is planning to grow at a constant rate of 8%. The weighted average cost of capital is 12%.

  • What is the continuing value of the operations? (Hint: Determine the value of the cash flows after year 2, discounted to that year.)
  • Calculate the value of the operations.


Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!