1. Assume the following free cash flows for Zhang Inc. for 2011 and forecasted FCFF for 2012 onward (in millions):
| |
Current
|
Forecast Horizon
|
Terminal Year
|
|
($millions)
|
2011
|
2012
|
2013
|
2014
|
2015
|
|
Free cash flows to the firm (FCFF)
|
$5,138
|
$5,396
|
$5,794
|
$6,624
|
$7,290
|
$7,578
|
The DCF value of the firm using the FCFF information above, a discount rate of 8%, and an expected terminal growth rate of 3.5%, is: