3. An Analyst is evaluating Quickie Inc. and shared the following projected net cash flows for the next 10 years. Year 1 Year 2 Year 3 1 000 000 1 000 000 1 150 000 Year 4 1 200 000 Year 5 Year 6 Year 7 1 200 000 1 300 000 1 500 000 Year 8 1 700 000 Year 9 Year 10 2 000 000 2 200 000 Quickie Inc. expects to continue to grow infinitely using CAGR of the 10- year forecast period. Required return relevant to the company is at 12%. 1. What is the compounded annual growth rate of 10-yr net cash flow projection? 2. What is the terminal value incorporated in the net cash flow to firm computation?
3. An Analyst is evaluating Quickie Inc. and shared the following projected net cash flows for the next 10 years. Year 1 Year 2 Year 3 1 000 000 1 000 000 1 150 000 Year 4 1 200 000 Year 5 Year 6 Year 7 1 200 000 1 300 000 1 500 000 Year 8 1 700 000 Year 9 Year 10 2 000 000 2 200 000 Quickie Inc. expects to continue to grow infinitely using CAGR of the 10- year forecast period. Required return relevant to the company is at 12%. 1. What is the compounded annual growth rate of 10-yr net cash flow projection? 2. What is the terminal value incorporated in the net cash flow to firm computation?
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...
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