Calculate the value of kendra operations

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Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 6%. The company's weighted average cost of capital is 16%.

Problem 1: What is the terminal, or horizon, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest cent.$______________?

Problem 2: Calculate the value of Kendra's operations. Round your answer to the nearest cent. Do not round intermediate calculations.

Reference no: EM132861535

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