You are valuing a company using the WACC approach and have estimated that the free cash flows from the firm (FCFF) in the next five years will be $ 36.6, $ 40.1, $ 43.1, $ 47.2, and $ 47.5 million, respectively. Beginning in year 6, you expect the cash flows to decrease at a rate of 3 percent per year for the indefinite future. You estimate that the appropriate WACC to use in discounting these cash flows is 9 percent. What is the value of this company? (Round answer to 2 decimal places, e.g. 52.75.)

You are valuing a company using the WACC approach and have estimated that the free cash flows from the firm (FCFF) in the next five years will be $ 36.6, $ 40.1, $ 43.1, $ 47.2, and $ 47.5 million, respectively. Beginning in year 6, you expect the cash flows to decrease at a rate of 3 percent per year for the indefinite future. You estimate that the appropriate WACC to use in discounting these cash flows is 9 percent. What is the value of this company? (Round answer to 2 decimal places, e.g. 52.75.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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