Question: A Discounted Cash Flow Valuation (Easy) At the end of2012, you forecast the following cash flows (in millions) for a firm with net debt of $759 million:
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You forecast that free cash flow will grow at a rate of 4 percent per year after 2015. Use a required return of l 0 percent in answering the following questions.
a. Calculate the firm's enterprise value at the end of 2012.
b. Calculate the value of the equity at the end of 2012.