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Problem:

Zhdanov Inc. forecasts that its free cash flow in the coming year, i.e., at t = 1, will be -$10 million, but its FCF at t = 2 will be $20 million. After Year 2, FCF is expected to grow at a constant rate of 4% forever. If the weighted average cost of capital is 14%,

Required:

Question 1: What is the firm's value of operations, in millions? Illustrate out all the calculation.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91146918

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