Question: widgets Inc. is about to make its initial public stock offering. The firm is entirely financed by equity and is expected to have the following

widgets Inc. is about to make its initial public stock offering. The firm is entirely financed by equity and is expected to have the following free cash flows: Year 1/- 50 million, Year 2: -25 million, Year 3: 75 million, Year 4: 100 million, Year 5: 150 million. At the end of year five, the firm is expected to grow at 5% per year forever. If investors currently demand a 15% return, what is the value of the firm?

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