11. The firm's free cash flows are expected to be unstable during the next few years while the company undergoes restructuring. However, FCF is expected to be P 50 million in Year 5, i.e., FCF at t= 5 equals P 50 million, and the FCF growth rate is expected to be constant at 5% beyond that point. If the weighted average cost of capital is 12.5%, what is the horizon value (in millions) at t = 6? a. P 700 c. P 883 b. Р 667 d. P 441

11. The firm's free cash flows are expected to be unstable during the next few years while the company undergoes restructuring. However, FCF is expected to be P 50 million in Year 5, i.e., FCF at t= 5 equals P 50 million, and the FCF growth rate is expected to be constant at 5% beyond that point. If the weighted average cost of capital is 12.5%, what is the horizon value (in millions) at t = 6? a. P 700 c. P 883 b. Р 667 d. P 441

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 27P

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