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What is the terminal, or horizon, value of operations

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Question - Value of Operations - Kendra Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 5%. The company's weighted average cost of capital is 15%.

a. What is the terminal, or horizon, value of operations?

b. Calculate the value of Kendra's operations. Do not round intermediate calculations.

Reference no: EM133136671

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