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? Show your work in excel and attach the excel file. Please show all calculations with the formulas in the excel sheet
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? Show your work in excel and attach the excel file. Please show all calculations with the formulas in the excel sheet
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter7: Corporate Valuation And Stock Valuation
Section: Chapter Questions
Problem 11P: Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors...
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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?
Show your work in excel and attach the excel file.
Please show all calculations with the formulas in the excel sheet
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