Company forecasts the free cash flows

Reference no: EM13156024

A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions? show your calculation.

Year: 1 2 3

Free cash flow: -$15 $10 $40

a. $315

b. $331

c. $348

d. $367

e. $386

Reference no: EM13156024

Questions Cloud

What is the best estimate of the stock price per share : The company has 10 million shares of stock outstanding. What is the best estimate of the stock's price per share? show your calculation.

Calculate the de broglie wavelength (in pm) of a hydrogen : The smallest atoms can themselves exhibit quantum mechanical behavior. Calculate the de Broglie wavelength (in pm) of a hydrogen atom traveling 475 m/s

What is the corresponding pressure difference between points : what is the corresponding pressure difference between points A and B, in mmHg. At which point (A or B) is the pressure higher, and why? The temperature is 60 °F throughout

Normal distribution to estimate percent of homes selling : Standard deviation of $47.11. Use the normal distribution to estimate the percent of homes selling for more than $280.00.

Company forecasts the free cash flows : A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3.

How many moles of carbon monoxide (co) are needed : Fe2O3(s) + 3CO(g)-> 2Fe(s) + 3CO2(g) Based on this equation, how many moles of carbon monoxide (CO) are needed to react completely with 1.75 moles of iron (lll) oxide (FeO3)??

Decision to buy model a if repair cost is given : Standard deviation was $15.50. For 56 Model B ovens, the mean repair cost was $85 and the standard deviation was $30. At alpha=.01, would you buy Model A?

Principals of civil liability for negligence : Explain the principals of civil liability for negligence and strict liability for aviation accidents and prudent risk management practices to limit liability exposure to individuals and companies.

Explain what mass of each one would you use to match : What reagents would you recommend and what mass of each one would you use to match the concentrations of Na+, Cl-, Mg2+, Ca2+ and SO42- given in the table above?

User Account

All Pages