Multiple Choice
Kinkead Inc.forecasts that its free cash flow in the coming year, i.e., at t = 1, will be −$10 million, but its FCF at t = 2 will be $20 million.After Year 2, FCF is expected to grow at a constant rate of 4% forever.If the weighted average cost of capital is 14%, what is the firm's value of operations, in millions?
A) $158
B) $167
C) $175
D) $184
E) $193
Correct Answer:
Verified
Correct Answer:
Verified
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