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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