Gupta Corporation Is Undergoing a Restructuring,and Its Free Cash Flows

question 22

Multiple Choice

Gupta Corporation is undergoing a restructuring,and its free cash flows are expected to vary considerably during the next few years.However,the FCF is expected to be $65.00 million in Year 5,and the FCF growth rate is expected to be a constant 6.5% beyond that point.The weighted average cost of capital is 12.0%.What is the horizon (or continuing) value (in millions) at t = 5?

• A)$1,025
• B)$1,079
• C)$1,136
• D)$1,196
• E)$1,259

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