Solution-What is an appropriate value for roc

What is an appropriate value for roc

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Reference no: EM133067785

We are trying to value Tangled Up In Blue (TUIB) using the FCFF approach. TUIB has a strong brand name and is considered to be the leader in its industry. TUIB has trademarked several of its brands and has many patents. Over the last 15 years, TUIB's ROC has averaged 18% and its WACC has averaged 8%. In doing your valuation, you have assumed a non-constant growth rate for 19 years and then constant growth beginning in year 20. Assuming your WACC will remain constant at 8%, what is an appropriate value for ROC in the terminal year (year 20).

A. less than 8% but higher than zero

B. greater than 8% but less than 12%

C. 18%

D. greater than 18%

Reference no: EM133067785

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What is an appropriate value for roc

Reference no: EM133067785

Reference no: EM133067785

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