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Compute the Value of a Firm with Free Cash Flows

Question 60

Multiple Choice

Compute the value of a firm with free cash flows of $1000,$2500,and $3000 over the next three years,a terminal firm value of $40,000 after three years,and the unlevered cost of capital is 15%.Assume that the interest rate tax shield is zero.


A) $26,191
B) $27,234
C) $31,033
D) $39,343
E) $44,926

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