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Nutka1998 [239]
3 years ago
8

A company is undergoing a restructuring, and its free cash flows are expected to vary considerably during the next few years. Ho

wever, the FCF is expected to be $85.00 million in Year 5, and the FCF growth rate is expected to be a constant 6.5% beyond that point. The weighted average cost of capital is 12.0%. What is the horizon (or continuing) value (in millions) at t
Business
1 answer:
Bumek [7]3 years ago
7 0

Answer:

Value of company = $982.16

Explanation:

The free cash flow is the cash generated by a company that is not retained and reinvested. It is the cash flow available to all providers of capital . It is available to pay dividend or finance other project

The value of the company would be the present value of its free cash flow discounted at the weighted average cost of capital.

Value of company )year 4= 85/(0.12-0.065) = 1,545.45

Value of company (in year 0) = 1,545.45× 1.12^(-4)= 982.16

Value of company = $982.16 millions

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Communicating value

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Communicating value involves showing others what makes one's product or skills different and better than others that are available.

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In order to achieve solid business strategy in the leadership plan, the three goals the leadership plan includes are attracting new customers, increasing revenue, and decreasing cost price.

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The detail of these goals is given below:

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