Symbyrec Phonic, an Electronics Manufacturer, Is Expected to Grow Rapidly

question 32

Multiple Choice

Symbyrec Phonic, an electronics manufacturer, is expected to grow rapidly in the next five years and then have a stable growth rate for the foreseeable future. The firm expects free cash flows of $262.5 million next year. These cash flows are expected to grow at a 30 percent rate over the following four years, and thereafter its cash flows will grow at a steady rate of 6 percent per annum. The company has nonoperating assets (NOA) of $31 million in the form of cash. If the appropriate WACC is 9 percent, what is the enterprise value of this business? (Do not round intermediate computations. Round final answer to the nearest million.)

• A) $26,490 million
• B) $22,222 million
• C) $19,014 million
• D) $22,191 million

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