question archive A company forecasts free cash flow of $40 million in three years
Subject:BusinessPrice:2.87 Bought7
A company forecasts free cash flow of $40 million in three years. It expects the free cash flow to grow at a constant rate of 5 percent thereafter. If the weighted average cost of capital is 12 percent and the cost of equity is 15 percent, what is the horizon value, to the nearest million?
$280 million
$400 million
$420 million
$840 million
$600 million
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