Problem:
An analyst predicted the free cash flows for ACME Corporation for the next four years:
|
Year
|
Free Cash Flow
|
|
2009
|
10 million
|
|
2010
|
15 million
|
|
2011
|
22 million
|
|
2012
|
30 million
|
After 2012, the free cash flows are expected to grow at an annual rate of 5%. If the WACC of XYZ Corp is 12%, what is the enterprise value of the firm?
A. $341.59 million
B. $56.56 million
C. $331.62 million
D. $308.04 million
Additional Information:
This question is basically belongs to the Finance as well as it is about computation of value of the firm using cash flows.