Why is the following diagram important to managers and stakeholders of a firm/corporation? Your discussion should...
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Why is the following diagram important to managers and stakeholders of a firm/corporation? Your discussion should include descriptions of FCF and WACC, the effect of cash flow size, timing and risk, types of financing and firm value. Your answer should be 4 to 6 sentences in length and point form is acceptable. Sales Revenues Operating Costs and Taxes Required Investments in Operations Free Cash Flows (FCF) Value = FCF₁ (1 + WACC)¹ Financing Decisions Value of the Firm FCF₂ (1+WACC)² Interest Rates Weighted Average Cost of Capital (WACC) Firm Risk FCF₂ (1+WACC)³ FCF (1 + WACC) Market Risk Why is the following diagram important to managers and stakeholders of a firm/corporation? Your discussion should include descriptions of FCF and WACC, the effect of cash flow size, timing and risk, types of financing and firm value. Your answer should be 4 to 6 sentences in length and point form is acceptable. Sales Revenues Operating Costs and Taxes Required Investments in Operations Free Cash Flows (FCF) Value = FCF₁ (1 + WACC)¹ Financing Decisions Value of the Firm FCF₂ (1+WACC)² Interest Rates Weighted Average Cost of Capital (WACC) Firm Risk FCF₂ (1+WACC)³ FCF (1 + WACC) Market Risk
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The diagram is crucial for managers and stakeholders because it illustrates the key factors that impact the value of a firm or corporation Heres why i... View the full answer
Related Book For
Modern Systems Analysis And Design
ISBN: 9780134204925
8th Edition
Authors: Joseph Valacich, Joey George
Posted Date:
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