How to estimate the market value of the firm

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Problem 1: Free cash flow to The Brillo Brushes Company in the current year for the entire firm is $7.4 million and for the Cleaners division is $3.1 million. The total firm and the Cleaners division are each expected to grow at the same 8% rate into the foreseeable future. Also assume a WACC of 10% for the firm and 9% for the Cleansers division. In this question estimate the market value of the firm. Choose the best answer from the choices below.

[A] $399.6 million

[B] $370 million

[C] $740 million

[D] $799.2 million

Reference no: EM132653270

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