The firms cash is considered to grow

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Reference no: EM131301987

Consider a firm that this year generated free cash flow of $150million. The firm's cash is considered to grow by 2% anually towards infinity. The WACC (discount rate) is 10%

a) Value the firm in the scenario above

b) Consider now that the ECB increase interest rates. Hence the WACC will increase to 15%. Value the firm in this scenario

c) Consider now that an example where the firm's cash flows grow by 8% annually until t=5, after t=5, the growth rate is considered to slow down to 2% annually. Value the firm in this scenario.

Reference no: EM131301987

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