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Assume you are conducting a discounted cash flow valuation of Family Health Associates. You have assembled the following financial information (all numbers are in millions). The after tax-cost of debt is 7 percent, the cost of equity is 19 percent, and the weighted average cost of capital is 14.2 percent.

Year 1 Year 2 Year 3 Year 4

Net profit $3.0 $3.2 $4.0 $5.2

Depreciation 6.0 6.0 7.0 7.0

Equity retentions 3.0 4.0 5.0 6.0

Terminal value 60.0

What is the estimated value of Family Health Associates?

$45.3 million

$65.6 million

$52.2 million

$67.9 million

$77.4 million

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92424425

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