Your colleague Sam disagree with you. She feels the FCFs should be modeled with a two-stage growth
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Question:
Your colleague Sam disagree with you. She feels the FCFs should be modeled with a two-stage growth rate. During the first five years, Sam estimates the growth rate of FCF should be 8% per year starting at $4 million in year 1. Starting year 6, XYZ's FCF will grow at 2% per year for the indefinite future. Given 12% cost of capital, what is the value of the firm's future cash flows under this set of assumptions?
Related Book For
Financial Management for Public Health and Not for Profit Organizations
ISBN: 978-0132805667
4th edition
Authors: Steven A. Finkler, Thad Calabrese
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