What do you think your firm is worth today

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Reference no: EM131234107

Your firm just finished the year, in which it had cash earnings of $400 (thousand).

You forecast your firm to have a quick growth phase from year 0 to year 5, in which it grows at a rate of 40% per annum.

Your firm's growth then slows down to 20% per annum, from year 5 to year 10.

Finally, beginning in year 11, you expect the firm to settle into its long-term growth rate of 2% per annum. You also expect your cost of capital to be 15% over the first 5 years, then 10% over the next 5 years, and 8% thereafter.

What do you think your firm is worth today?

(Note: This problem is easiest to work in a computer spreadsheet.)

Reference no: EM131234107

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