Question

Diversified Industries, Inc. forecasts that its free cash flow in the coming year, i.e., at t...

Diversified Industries, Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$18 million (negative), but its FCF at t = 2 will be $33 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 15%, what is the firm's value of operations, in millions? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box.  

0 0
Add a comment Improve this question Transcribed image text
Answer #1

computation of value of the firms operations 15 $ 0 million 1 year fet prf @ 151 present value of cash on flows -1808696 - 15

Add a comment
Know the answer?
Add Answer to:
Diversified Industries, Inc. forecasts that its free cash flow in the coming year, i.e., at t...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT