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What is the horizon value of the unlevered operations

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Unlevered Value Richter

Manufacturing has a 10% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant 3% rate after Year 3

                 Year 1              Year 2             Year 3

FCF          $715                $750                 $805

Problem a. What is the horizon value of the unlevered operations?

Problem b. What is the total value of unlevered operations at Year 0?

Reference no: EM132674768

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