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What is the firm value

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Question - You are evaluating the potential purchase of a Medium Enterprise currently generating $32,500 of after tax cash flow. On the basis of a review of similar-risk investment opportunities, you must earn an 15.5% rate of return on the proposed purchase. Because you are relatively uncertain about future cash flows, you decide to estimate the firm's value using several possible assumptions about the growth rate of cash flows. What is the firm's value if cash flows are expected to grow at an annual rate of 0% from now to infinity?

Reference no: EM133027811

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