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Assuming ABC Ltd's free cash flow is R45 000 in year one and grows at a constant rate of 5% p.a. for years 2 through to
Posted: Sun May 08, 2022 10:25 am
by answerhappygod
- Assuming Abc Ltd S Free Cash Flow Is R45 000 In Year One And Grows At A Constant Rate Of 5 P A For Years 2 Through To 1 (30.8 KiB) Viewed 34 times
Assuming ABC Ltd's free cash flow is R45 000 in year one and grows at a constant rate of 5% p.a. for years 2 through to year 5. After year 5 the free cash flows grow at 3% into perpetuity. Calculate the present value of the "terminal value" free cash flow (excluding the present value of cash flows for years 1 to 5). The cost of capital for ABC Ltd is 12%. Assume cash flows are earned at the end of the period. R424,308 R355,201 R362,373 R317,143