Gustav believes that anton bs cash flows will grow by 2 per


Gustav, Inc. is considering a takeover bid for Anton B Corp., a firm dedicated to writing the background music for religious productions. As part of Gustav’s due diligence, they have asked you to value Anton B Corp. Anton B’s free cash flows to the firm are expected to be $7.5 million next year and $15 million the following year. Beginning in year 3, Gustav believes that Anton B’s cash flows will grow by 2% per year in perpetuity. Anton B’s WACC is 9%. What is Anton B’s intrinsic value?

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Financial Management: Gustav believes that anton bs cash flows will grow by 2 per
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