JenBritt Incorporated had a free cash flow (FCF) of $80 million in 2019. The firm projects FCF of $200 million in 2020 and $500 million in 2021. FCF is expected to grow at a con- stant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
JenBritt Incorporated had a free cash flow (FCF) of $80 million in 2019. The firm projects FCF of $200 million in 2020 and $500 million in 2021. FCF is expected to grow at a con- stant rate of 4% in 2022 and thereafter. The weighted average cost of capital is 9%. What is the current (i.e., beginning of 2020) value of operations?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter8: Basic Stock Valuation
Section: Chapter Questions
Problem 7P: Current and projected free cash flows for Radell Global Operations are shown here. Growth is...
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