What is the firm exit valuation

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A start-up is planning to do an IPO this year. The VC is attempting the calculate the firm's exit valuation based on the following assumptions. The industry average rate of growth in cash flows is 7%. For the first three years cash flows will grow at a rate of 3% over the industry average. From the fourth year onward, cash flows will grow at the industry average rate. The company's prior year cash flow was $2 million. Assume a risk-adjusted discount rate of 10%.

What is the firm's exit valuation? (Do not round your intermediate calculations. Enter your final answer rounded, if necessary, to 2 decimal places without the $ symbol).

Reference no: EM133119550

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