Homework Answers
ANSWER
| Discount rate | 15.0000% | ||
| Cash flows | Year | Discounted CF= cash flows/(1+rate)^year | Cumulative cash flow |
| - | 0 | - | - |
| 3.000 | 1 | 2.61 | 2.61 |
| 3.600 | 2 | 2.72 | 5.331 |
| 4.680 | 3 | 3.08 | 8.41 |
| 5.616 | 4 | 3.21 | 11.62 |
| 6.178 | 5 | 3.07 | 14.69 |
| 64.865 | 5 | 32.25 | 46.94 |
terminal value = 6.1750*1.05/(0.15 - 0.05) = 64.865
value of share = 46.94
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