Compute the Value of a Firm with Free Cash Flows

question 59

Multiple Choice

Compute the value of a firm with free cash flows of $1,000, $2,500, and $3,000 over the next three years, a terminal firm value of $40,000 after three years, and the unlevered cost of capital is 15%. Assume that the interest rate tax shield is zero.

• A) $26,191
• B) $27,234
• C) $31,033
• D) $39,343

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