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A company’s free cash flow was just FCF0 = $6.69 million. The weighted average cost of...

A company’s free cash flow was just FCF0 = $6.69 million. The weighted average cost of capital is

WACC = 14%, and the constant growth rate is g = 6%. What is the current value of operations?

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Expert Solution

Value of operations = Expected Free cash flow in year 1/(Required rate of return - growth rate)

= 6.69 million*(1+6%)/(14%-6%)

= $88.6425 million

jeff jeffy answered 2 years ago
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