ecall the Value of the Firm0 = Ʃ FCFt / [1 + WACC]t with t from 1 to ∞. The owners of Martial Arts Inc. [the owner/operator of a chain of karate dojos] are considering selling their business to a private equity firm. Next year’s end-of-year free cash flow (FCF1) is expected to be $1.25 million, lower than recent years due to a major expansion. Free Cash Flow is expected to grow at the rates shown in the table below thereafter. Beginning in year 7 a constant growth rate of 4% is forecast. The company's WACC is 6.50%. What is the estimated intrinsic value of the firm in millions of dollars? Round to two decimals. Year 0 1 2 3 4 5 6 7 Growth Rates 20.00% 15.00% 10.00% 8.00% 6.00% 4.00% $54.57

ecall the Value of the Firm0 = Ʃ FCFt / [1 + WACC]t with t from 1 to ∞. The owners of Martial Arts Inc. [the owner/operator of a chain of karate dojos] are considering selling their business to a private equity firm. Next year’s end-of-year free cash flow (FCF1) is expected to be $1.25 million, lower than recent years due to a major expansion. Free Cash Flow is expected to grow at the rates shown in the table below thereafter. Beginning in year 7 a constant growth rate of 4% is forecast. The company's WACC is 6.50%. What is the estimated intrinsic value of the firm in millions of dollars? Round to two decimals. Year 0 1 2 3 4 5 6 7 Growth Rates 20.00% 15.00% 10.00% 8.00% 6.00% 4.00% $54.57

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter17: Dynamic Capital Structures And Corporate Valuation

Section: Chapter Questions

Problem 8P

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