Given the Following Data

question 33

Multiple Choice

Given the following data:
FCF1 = $20 million; FCF2 = $20 million; FCF3 = $20 million; free cash flow grows at a rate of 5% for year 4 and beyond. If the weighted average cost of capital is 12%, calculate the value of the firm.

• A) $300 million
• B) $261.57 million
• C) $213.53 million
• D) None of the above

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Definitions:

Theory

A set of principles on which the practice of an activity is based.

Timeline

A visual representation or chronological sequence of events, used to track the progression and milestones within a particular period or project.

Depleted

Reduced in quantity, intensity, or strength; exhausted of resources or contents.

Gratitude

The quality of being thankful; readiness to show appreciation for and to return kindness.