Value of operation


Assume that Leonard, Nixon, and Shull Corporation's projected free cash flow for next year is $100,000 and FCF is expected to grow at a constant rate of 6%. If the company's weighted average cost of capital is 11%, determine the value of its operations?

a. $1,714,750

b. $1,805,000

c. $1,900,000

d. $2,000,000

e. $2,100,000

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Finance Basics: Value of operation
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