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  2. Topic
    Business
  3. Study Set
    Intermediate Financial Management
  4. Exam
    Exam 26: Mergers
  5. Question
    The Capital Structure Is Stable, and Free Cash Flows Are
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The Capital Structure Is Stable, and Free Cash Flows Are

Question 2

Question 2

True/False

the capital structure is stable, and free cash flows are expected to be growing at a constant rate at the horizon date, then the horizon value is calculated by discounting the free cash flows plus the expected future tax shields at the weighted average cost of capital.

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