What is the horizon value of a firm at time 4 given the free cash flow forecasts

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What is the horizon value of a firm at time 4 given the free cash flow forecasts for the next 4 years and assuming a growth rate of 2% thereafter? The cost of capital is 16%.

Year 1: 6100

Year 2: 7200

Year 3: 8000

Year 4: 8800

What is the contribution of the horizon value to the current firm value?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-0133400694

1st canadian edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi

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Posted Date: Jun 10, 2023 07:49 AM

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What is the horizon value of a firm at time 4 given the free cash flow forecasts

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To calculate the horizon value of a firm at time 4 we need to determine the perpetuity value of the ... View the full answer

Fundamentals of Corporate Finance

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