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    Dozier's terminal, or horizontal value

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    Please help with the following:

    Brook's Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively, and after the second year it is expected to grow at a constant rate of 8%. The company's weighted average cost of capital is WACC= 12%

    a) What is the terminal, or horizontal, value of operations? (Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2)
    b) Calculate the value of Brook's operations.

    Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows (FCFs) during the next 3 years, after which FCF is expected to grow at a constant 7% rate. Dozier's cost of capital is WACC=13%

    Time 1 2 3
    Free Cash Flow -$20 $30 $40

    a) What is Dozier's terminal, or horizontal value?
    b) What is the current value of operations for Dozier?
    c) Suppose Dozier has $10 million in marketable securities, $100 million in debt, and 10 million shares of stock. What is the price per share?

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    https://brainmass.com/business/weighted-average-cost-of-capital/85440

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    Please help with the following:

    Brook's Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively, and after the second year it is expected to grow at a constant rate of 8%. The company's weighted ...

    Solution Summary

    This provides the steps to calculate the Dozier's terminal, or horizontal value

    $2.19

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