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

---

Definitions:

Randomized Block Design

A statistical design for experiments that aims to reduce the effects of confounding variables by organizing subjects into blocks based on these variables before randomly assigning treatments.

ANOVA Models

ANOVA models are statistical models used to analyze the differences among group means in a sample, typically by comparing variance between groups to variance within groups.

Degrees of Freedom

The count of independent variables or measurements that can be allocated to a statistical distribution, subtracting the quantity of estimated parameters.

Number of Blocks

In experimental design, the total count of groups or sets into which experimental units are divided for the purpose of minimizing variance due to confounding variables.