Solving for the Horizon Value
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Question: Current projected free cash flows for Radell Global Operations are shown below. Growth is expected to be constant after 2012 and the weighted average cost of capital is 11%. What is the horizon value at 2012?
Free Cash Flow Actual Projected
2010 2011 2012 2013
696.82 667.50 707.55 750.00
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Solution Summary
Using the Radell Global Operations example, the horizon value is found.
Solution Preview
Horizon value in 2012 = FCF in 2013/(WACC- Growth rate)
FCF ...
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