Value of Operations: Constant GrowthEMC Corporation has never paid a dividend. Its current free cash flow of $490,000 is expected to grow at a constant rate of 4.9%. The weighted average cost of capital is WACC = 12.25%. Calculate EMC's estimated value of operations. Round your answer to the nearest dollar.

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Asked Sep 16, 2019
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Value of Operations: Constant Growth

EMC Corporation has never paid a dividend. Its current free cash flow of $490,000 is expected to grow at a constant rate of 4.9%. The weighted average cost of capital is WACC = 12.25%. Calculate EMC's estimated value of operations. Round your answer to the nearest dollar.

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The value of the firm is the present value of the Equity discounted by the cost of capital. When there is constant growth rate, the expected free cash flow after 1 year is Free Ca...

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