1nbspassume the following free cash flows for zhang inc for


1.       Assume the following free cash flows for Zhang Inc. for 2011 and forecasted FCFF for 2012 onward (in millions):

 

Current

Forecast Horizon

Terminal Year

($millions)

  2011 

       2012

2013

2014

          2015

Free cash flows to the firm (FCFF)

$5,138         

     $5,396

$5,794

$6,624 

         $7,290

$7,578

 The DCF value of the firm using the FCFF information above, a discount rate of 8%, and an expected terminal growth rate of 3.5%, is:

  • $144,360 million

  • $135,190 million

  • $ 37,820 million

  • $ 25,738 million

  • None of the above

 

 

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Finance Basics: 1nbspassume the following free cash flows for zhang inc for
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