Income Approaches: Quicksilver Software Co

question 4

Multiple Choice

Income approaches: Quicksilver Software Co. is expected to grow rapidly in the next three years and then have no growth for the foreseeable future. The company expects free cash flows of $9.1 million, $11.4 million, and $17.7 million over the next three years, and thereafter its cash flows will stay constant. The company has no nonoperating assets. If the appropriate WACC is 12 per cent and debt of 44.5 million, what is the equity value of this business? Round to the nearest million.

• A) $135 million
• B) $105 million
• C) $45 million
• D) $90 million

---

Definitions:

Cognitive Effects

Changes in thinking, understanding, learning, or remembering that can result from various factors, including environmental, psychological, or biological causes.

Dementia

Deterioration in cognitive and behavioral functioning due to physiological causes.

Physiologically Caused

Originating from or prompted by the functioning of an organism’s body.

Memory Loss

A condition where a person loses the ability to remember information or events that they would normally be able to recall.