What is the horizon value of the unlevered operations

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Richter Manufacturing has a 10% unlevered cost of equity. Richter forecasts the following free cash flows (FCFs), which are expected to grow at a constant 3% rate after Year 3.

FCF of year 1: $715
FCF of year 2: $750
FCF of year 3: $805

Problem 1: What is the horizon value of the unlevered operations?

Problem 2: What is the total value of unlevered operations at Year 0?

Reference no: EM132822516

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