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Ted Corporation expects to generate free-cash flows of $200,…

Posted byAnonymous June 27, 2021December 1, 2023

Questions

Ted Cоrpоrаtiоn expects to generаte free-cаsh flows of $200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever. If the firm's average cost of capital is 15 percent, the market value of the firm's debt is $500,000, and Ted has a half million shares of stock outstanding, what is the value of Ted stock?

Ted Cоrpоrаtiоn expects to generаte free-cаsh flows of $200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever. If the firm's average cost of capital is 15 percent, the market value of the firm's debt is $500,000, and Ted has a half million shares of stock outstanding, what is the value of Ted stock?

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Tags: Accounting, Basic, qmb,

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