You are an equity analyst valuing Edinburgh plc. It is a growth company and is not planning
Fantastic news! We've Found the answer you've been seeking!
Question:
You decide to use a Discounted Free Cash Flow model to value Edinburgh plc. You forecast that it will have free cash flow of £5 million one year from now (t=1), which will grow by 6% per year thereafter over the next 9 years, up to and including the free cash flow in ten years' time (t = 10), in a high growth stage.
After this, you forecast that the free cash flow will grow at 1% afterwards (forever), in a low growth stage? The firm's Weighted Average Cost of Capital (WACC) is estimated to be 11%?
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date: