Question: Hello, kindly help me solve this problem about the Investment value at the horizon (continuous). You receive the following projected information for 2009: Sales =

Hello, kindly help me solve this problem about the Investment value at the horizon (continuous).

You receive the following projected information for 2009:

Sales = $ 300,000,000;

Operational profit (OP) = 6%;

Capital needs (CN) = 43%;

Growth (g) = 5%;

Weighted average cost of capital (WACC) = 9.8%.

If the values do not change, what will the continuing value be (that is, the value of operations in 2009)?

Reference book:

Corporate Finance: A Focused Approach by Ehrhardt and Brigham Second Edition

Thanks!

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