3. A company forecasts free cash flow in one year to be -$80 million and free...

Question

Question

Answer 1

Answer #1

3)

A)

Horizontal value. = 200*1.06/14%-6%

= 2650 million

b)

Current value = -80/1.14 + 200/1.14^2 + 2650/1.14^3

= 1872.39 million

Answer 2

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