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    Calculate value of operations using WACC

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    Ryan Enterprises forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13.0%, and the FCFs are expected to continue growing at a 5.0% rate after Year 3.

    What is the Year 0 value of operations, in millions?

    Year 1 2 3
    FCF -$15.0 $10.0 $40.0

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    Solution Preview

    Use the perpetuity growth formula to discount the cash flow after year 3 to year ...

    Solution Summary

    Provides steps necessary to calculate the weighted average.