if this years free cash flow is 500 million and the growth rate of the cash flow is 5% with a required return of 10%, the value of operation is a little over 10 billion. T/F
(Value of Operations = Free cash Flow *(1+Growth)/(Required Rate
- Growth) = 500*(1+5%)/(10%-5%) = 10,500 or 10.5 billion
Hence False because value of operations is 10.5 and not 10
billion
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if this years free cash flow is 500 million and the growth rate of the cash...
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