Exhibit 12.7 Use the Information Below for the Following Problem(S)

question 73

Multiple Choice

Exhibit 12.7
Use the Information Below for the Following Problem(S)
You are using the free cash flow to equity (FCFE) technique to analyze U.S. equity market. The beginning FCFE is $90 and the required rate of return is 10%. Free cash flows are expected to grow at a 10% rate for the next two years and then grow at a constant rate of 7% forever.
-Refer to Exhibit 12.7.What will FCFE be three years from now?

• A) 108.90
• B) 116.52
• C) 117.00
• D) 119.79
• E) 120.21

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Definitions:

Contralateral

Relating to or affecting the opposite side of the body.

Otitis Externa

An infection of the outer ear canal, often referred to as swimmer's ear, leading to inflammation, redness, and pain.

Ototoxic

Refers to substances that can cause temporary or permanent hearing loss or balance disorders due to damage to the inner ear.

Stapes

The smallest bone in the human body, located in the middle ear, and is involved in the conduction of sound vibrations to the inner ear.