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Calculating the terminal value and value of operations

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The Beatle Co. has never paid a dividend. FCF is projected to be $40,000 and $50,000 for the next two years, and after the second year it is expected to grow at a constant rate of 6%. The WACC is 11%.

1) What is the terminal or horizon, value of operations in millions?

2) What is the value of the Beatle Company operations?

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Solution depicts the steps to calculate the terminal value and value of operations.

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1) What is the terminal or horizon, value of operations in millions?
FCF1=$40000
FCF2=$50000
Growth ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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