Question: Problem # 5 : You forecast that year 1 unlevered cash flows for a firm are expected to be $ 8 5 . 2 million.
Problem #: You forecast that year unlevered cash flows for a firm are expected to be $ million. You expect those cash flows to grow at some high growth rate gh for years so the cash flows for years through are each gh times as large as the prior year. Starting in year you expect growth to slow to a permanent annual growth rate of Thus, the year cash flow will be larger than year the year cash flow will be larger than year and so on The firm uses no debt and its cost of capital is If the current enterprise value of the firm is $ billion, what is gh
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