Brooks enterprises has never paid a dividend free cash flow


Brooks Enterprises has never paid a dividend. Free cash flow is projected to be $60,000 and $100,000 for the next 2 years, respectively; after the second year FCF is expected to grow at a constant rate of 5%. The company's weighted average cost of capital is 12%.

What is the terminal, or horizon, value of operations?

(Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) Round your answer to the nearest dollar. $

Calculate the value of Brooks' operations. Round your answer to the nearest cent. $

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Financial Management: Brooks enterprises has never paid a dividend free cash flow
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