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eBook Problem 7-06 Value of Operations: Constant Growth EMC Corporation has never paid a dividend. Its current free cash flow
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Answer #1

Year 1 free cash flow = 400,000 (1 + 4.5%) = 418,000

Value of operations = FCF1 / required rate - growth rate

Value of operations = 418,000 / 0.1125 - 0.045

Value of operations = 418,000 / 0.0675

Value of operations = $6,192,593

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