Compute the Value of a Firm with Free Cash Flows

question 79

Multiple Choice

Compute the value of a firm with free cash flows of $9,000, $7,000, and $5,000 over the next three years, a terminal firm value of $30,000 after three years, and the unlevered cost of capital is 10%. Assume that the interest rate tax shield is zero.

• A) $36,109
• B) $37,098
• C) $38,745
• D) $40,263

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Conspicuous

Something easily seen or noticed; clearly visible or attracting attention due to its distinctiveness.

Strict Liability

A legal doctrine that holds a party responsible for their actions or products, without the plaintiff having to prove negligence or fault.

Unreasonably Dangerous

A legal term describing a product or condition that poses a significant risk of harm to people or property.

Protruding

Extending out or projecting in space.