problem: As a part of the last project Assignment, on Tuesday, December 2, 2008, of this week you will do the Valuation using Free Cash Flows [FCF]. The given free cash flows [in $ Million] are projected for the next 5 years. The free cash flows are expected to grow at a stable rate of seven percent for every year after year five. The opportunity cost of capital is 10 percent. Compute the current value of the firm using the constant growth model after year 5. As a first step compute the terminal value of the firm at the end of year 5.
Year

Year 1

Year 2

Year 3

Year 4

Year 5

Free Cash Flow

5

12

24

44

69
