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Cell Phone is a cellular firm that reported net income of $50 million in the most recent financial year. The firm had $1 billion in debt, on which it reported interest expenses of $100 million in the most recent financial year. The firm had depreciation of $100 million for the year, and capital expenditures were 200 percent of depreciation. The firm has a cost of capital of 11 percent. Assuming that there is no working capital requirement, and a constant growth rate of 4 percent in perpetuity, estimate the value of the firm.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91631245

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