In: Finance
Option #2: Case: Electronix Inc. Valuation
Electronix Inc. manufactures electronic products. The company's weighted average cost of capital is 8 percent. The company forecasted the following free cash flows for the next 20 years:
Year Free Cash Flows
1 $15,000,000
2 $16,200,000
3 $21,000,000
4 $23,000,000
5 $27,000,000
6-10 $25,000,000 per year
11-20 $21,000,000 per year