Tuesday, 21 April 2015

What is the value of a company with the following cash flows?

What is the value of a company with the following cash flows?


Year1 – $3 million

Year 2 – $6 million

Year 3 – $2 million

Years 4 – 10 – $2.5 million year 4, growing at 30% annually through year 10

Year 11 – 8% annual growth from year 10 cash flow indefinitely

WACC of 11.5%



What is the value of a company with the following cash flows?

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