Question: Please fill out the green section in excel 3. You are considering buying the Widget Company incuding assuming all of its $9 million outstanding debt.

 Please fill out the green section in excel 3. You are

Please fill out the green section in excel

3. You are considering buying the Widget Company incuding assuming all of its $9 million outstanding debt. The asking price is $110 million cash at closing. Shown below is a reliable free cash flow (after interest) forecast for the next five years You are comfortable with a discount rate of 15%. However you are wondering what growth rate beyond the first 5 years justifies the asking price. OUTPUT INPUT Year 1 ($Millions) 2 S 6.0 $ 3 10.0 4 13.0 5 $ 15.0 $ 2.0 S . PV = FCF Smillions S 2.0 $ 6.0 $ 10.0 $ 13.0 15.0 This cell should be the growth rate you assume after year 5 This cell should be the PV of cash flow after year 5 4 PV = 5 $ Value of the stock + Value of the debt = Value of the Firm: S

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