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What is the horizon value of the unlevered operations

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Reference no: EM132730911

Problem - 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

Required -

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

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

Reference no: EM132730911

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