Finance: Calculate EMC's value of operations
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EMC Corporation has never paid a dividend. It's current free cash flow of $400,000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC'S value of operations.
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Solution Summary
This solution illustrates, step by step, how to compute a corporation's value from its operations.
Solution Preview
The formula for the current value of operations is:
Current value of operations = [(Free cash ...
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