Gonzales Corporation Generated Free Cash Flow of $81 Million This

question 10

Multiple Choice

Gonzales Corporation generated free cash flow of $81 million this year. For the next two years, the company's free cash flow is expected to grow at a rate of 9%. After that time, the company's free cash flow is expected to level off to the industry long-term growth rate of 4% per year. If the weighted average cost of capital is 11% and Gonzales Corporation has cash of $100 million, debt of $300 million, and 100 million shares outstanding, what is Gonzales Corporation's expected free cash flow in year 2?

• A) $1429.79 million
• B) $86.61 million
• C) $1572.77 million
• D) $96.24 million

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High Intensity

A level of exercise or activity that requires a significant amount of effort and results in rapid breathing and increased heart rate.

Moderate-Intensity Exercise

Physical activity that elevates the heart rate to 50-70% of the maximum heart rate, perceived as "somewhat hard".

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An institution of higher education in the United States offering undergraduate and graduate degrees.

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A branch of medicine focusing on physical fitness, treatment, and prevention of injuries related to sports and exercise.