Answered: A company expects a constant FCF of…

A company expects a constant FCF of $240 million per yearforever. If the WACC is 12%, what is the value of operations?($2,000 million)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.2: Future Values

Problem 4ST

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

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A company expects a constant FCF of $240 million per year
forever. If the WACC is 12%, what is the value of operations?
($2,000 million)

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