What is the firms value of operations

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Reference no: EM13950758

Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%, what is the firm’s value of operations, in millions?

a. $167

b. $184

c. $193

d. $158

e. $175

Reference no: EM13950758

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