Note: The following information is common to the two Pwasato Co.
questions.
An analyst is in the process of estimating the market value of
Pwasato Co. Based on his analysis of the company’s financials, he
estimates the company’s free cash flow for the current year to be
$90.50 million. Since Pwasato Co. has just launched a well-received
product, the analyst believes that the company’s FCFs will increase
by 30% per year for the next 3 years. After the third year,...