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What is the value of the firm equity

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Question - You are valuing a new dot-com advertising firm. Free cash flow to the firm (FCFF) in the most recent year was $98 million (this is the time 0 cash flow). You expect these cash flows to grow at an annual rate of 12% for the next three years as the firm gains market share. You then expect growth to stabilize at a long run rate of 4.5% (in perpetuity). The firm currently has Cash and Marketable Securities worth $250 million and Total Debt of $1,200 million. The firm's weighted average cost of capital is 8% and its cost of equity is 12%. What is the value of the firm's equity?

Reference no: EM133034653

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