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What is the firm equity value

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Reference no: EM133061883

The following are forecasted residual operating income (ROPI) for Reed Corporation for Year 7:

 

Current

Forecast Horizon

Terminal

 

 

 

($millions)

Year 7

Year 8

Year 9

Year 10

Year 11

Year

Residual operating income (ROPI)

$1,999

$2,099

$2,204

$2,314

$2,430

$2,479

Assume a discount rate of 6%, an expected terminal growth rate of 2%, 2017 NOA of $29,896, and 2017 NNO of $17,314. What is the firm's equity value using the ROPI valuation model? 

Between ABD

Select one:

a. $79,584

b. $17,314

c. $56,899

d. None of these are correct

e. $72,777

Reference no: EM133061883

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