extensive enterprise inc. is expected to generate a free cash flow of $3,300.00 million this year,...

extensive enterprise inc. is expected to generate a free cash flow of $3,300.00 million this year, and the fcf is expected to grow at a rate of 21.40% over the following two years. After the third year, however, the fcf is expected to grow at a constant rate of 2.82% per year, which will last forever. If extensive enterprise inc.'s weighted average cost of capital is 8.46% what is the current total firm value of extensicve enterprise inc.?

10,260.11 Million

98,924.65 Million

79, 753.13 Million

95,703.76 Million

Expert Solution

rate	8.4600%
Cash flows	Year	Discounted CF= cash flows/(1+rate)^year	Cumulative cash flow
-	0	-	-
3,300.000	1	3,042.60	3,042.60
4,006.200	2	3,405.60	6,448.19
4,863.527	3	3,811.91	10,260.10
88,664.508	3	69,492.99	79,753.10

total value of firm = 79,753.13 million

jeff jeffy answered 1 year ago

Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $12,815.00 million this...

Extensive Enterprise Inc. is expected to generate a free cash flow (FCF) of $12,815.00 million this year (FCF₁ = $12,815.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Extensive Enterprise Inc.’s weighted average cost of...

Acme Inc. is expected to generate a free cash flow (FCF) of $15,290.00 million this year...

Acme Inc. is expected to generate a free cash flow (FCF) of $15,290.00 million this year (FCF₁ = $15,290.00 million), and the FCF is expected to grow at a rate of 25.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.90% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Acme Inc.’s weighted average cost of capital (WACC)...

Luthor Corp. is expected to generate a free cash flow (FCF) of $5,740.00 million this year...

Luthor Corp. is expected to generate a free cash flow (FCF) of $5,740.00 million this year (FCF₁ = $5,740.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Luthor Corp.’s weighted average cost of capital (WACC)...

Widget Corp. is expected to generate a free cash flow (FCF) of $9,835.00 million this year...

Widget Corp. is expected to generate a free cash flow (FCF) of $9,835.00 million this year (FCF₁ = $9,835.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Widget Corp.’s weighted average cost of capital (WACC)...

Praxis Corp. is expected to generate a free cash flow (FCF) of $135.00 million this year...

Praxis Corp. is expected to generate a free cash flow (FCF) of $135.00 million this year (FCF₁ = $135.00 million), and the FCF is expected to grow at a rate of 19.00% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.10% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Praxis Corp.’s weighted average cost of capital (WACC)...

Scampini Technologies is expected to generate $200 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $200 million in free cash flow next year, and FCF is expected to grow at a constant rate of 6% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 11%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent. Each share of common stock is worth $ , according to the...

Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $50 million in free cash flow next year, and FCF is expected to grow at a constant rate of 4% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 15%. If Scampini has 35 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent.

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF...

Scampini Technologies is expected to generate $25 million in free cash flow next year, and FCF is expected to grow at a constant rate of 5% per year indefinitely. Scampini has no debt or preferred stock, and its WACC is 15%. If Scampini has 45 million shares of stock outstanding, what is the stock's value per share? Do not round intermediate calculations. Round your answer to the nearest cent. Each share of common stock is worth $ , according to the...

Luthor Corp. is expected to generate free cash flow (FCF) of $7,790.00 million this year (FCF₁...

Luthor Corp. is expected to generate free cash flow (FCF) of $7,790.00 million this year (FCF₁ = $7,790.00 million), and the FCF is expected to grow at a rate of 21.40% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 2.82% per year, which will last forever (FCF₄). Assume the firm has no non-operating assets. If Luthor Corp.’s weighted average cost of capital (WACC) is...

Smith and T Co. is expected to generate a free cash flow (FCF) of $8,210.00 million...

Smith and T Co. is expected to generate a free cash flow (FCF) of $8,210.00 million this year (FCF₁ = $8,210.00 million), and the FCF is expected to grow at a rate of 23.80% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 3.54% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Smith and T Co.’s weighted average...

Question