Suppose Boyson Corporation's projected free cash flow for next year is FCF1 = $100,000, and FCF...

Suppose Boyson Corporation's projected free cash flow for next year is FCF1 = $100,000, and FCF is expected to grow at a constant rate of 6.5%. If the company's weighted average cost of capital is 11.5%, what is the firm's total corporate value?

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Expert Solution

total corporate value=FCF1/(WACC-Growth rate)

=100,000/(0.115-0.065)

which is equal to

=$2,000,000.

jeff jeffy answered 2 years ago

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