What is the current corporate value

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A firm has estimated its operating cash flows as below.

Year 1 2 3

Cash Flows $15.50 million $18.00 million $17.1 million

The weighted average cost of capital (WACC) is 10%. Between year 2 and year 3, the business may be shrunk due to a slowdown in the country. Unfortunately, since cash flows are expected to drop continuously at the same rate after year 3, the business will be sold by then. Firm also has a loan obligation of $10 million to be repaid at the end of year 2. What is the current corporate value?

Reference no: EM132465522

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