Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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The following are the projected cash flows to the firm over the next five years: 

 

Year Cash Flows to the Firm  (Million) 
1 $120
2 $145
3 $176
4 $199
5 $245

The firm has a cost of capital (WACC )of 12% and the cash flows are expected to grow at the rate of 4% in perpetuity? 

a) What is the value of the firm today?

b) At what growth rate will the firm have a value of $3000 Million?

 

Solution in excel please

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