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What is the discount rate used in the calculation

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Reference no: EM133109199

Question - Set out below is the estimated free cash flow to firm for Vertex Inc.:

Year

FCF (in $mm)

1

100

2

-80

3

120

4

130

5

140

Terminal value at the end of year 5 = $3,000 mm.

a. If the value of the operations is estimated at $2,360 mm, what is the discount rate (i.e. WACC) used in the calculation?

b. What is the constant growth rate used in the calculation of the terminal value?

Reference no: EM133109199

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