What is the value of the firm future cash flows

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Your colleague Sam disagree with you. She feels the FCFs should be modeled with a two-stage growth rate. During the first five years, Sam estimates the growth rate of FCF should be 8% per year starting at $4 million in year 1. Starting year 6, XYZ's FCF will grow at 2% per year for the indefinite future. Given 12% cost of capital, what is the value of the firm's future cash flows under this set of assumptions?

Reference no: EM132060971

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