# Value of Operations Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and$100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 9%. The company's weighted average cost of capital is 16%.   What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent. $Calculate the value of Kendra's operations. Round your answer to the nearest cent. Do not round intermediate calculations.$

Question

Value of Operations

Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and$100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 9%. The company's weighted average cost of capital is 16%.

1. What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent.

$2. Calculate the value of Kendra's operations. Round your answer to the nearest cent. Do not round intermediate calculations.$

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