Forecasts the free cash flows


Leak Inc. forecasts the free cash flows (in millions) shown below. If the weighted average cost of capital is 11% and FCF is expected to grow at a rate of 5% after Year 2, what is the Year 0 value of operations, in millions? Assume that the ROIC is expected to remain constant in Year 2 and beyond (and do not make any half-year adjustments). Year: 1 2 Free cash flow: -$50 $100 a. $1,456 b. $1,529 c. $1,606 d. $1,686 e. $1,770

Solution Preview :

Prepared by a verified Expert
Finance Basics: Forecasts the free cash flows
Reference No:- TGS0551507

Now Priced at $10 (50% Discount)

Recommended (95%)

Rated (4.7/5)