Cash flows are expected to produce at a constant rate

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Nico Corporation expects to make free-cash flows of $200,000 per year for the next five years. Beyond that time free cash flows are expected to produce at a constant rate of five percent per year forever. If the firm's average cost of capital is 15 percent the market value of the firm's debt is $500,000 as well as Nico has a half million shares of stock outstanding what is the value of Nico's stock?

Reference no: EM13107745

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