The abc co earned 10 million before interest and taxes on


The ABC Co. earned $10 million before interest and taxes on revenue of $60 million last year. Investment in fixed capital was $12 million, and depreciation was $8 million. Working capital investment was $3 million. The company expects sales, EBIT, investment in fixed and working capital, depreciation to grow at 12% per year for the next five years. After that, the growth will decline to a stable 4% per year, and investments in fixed assets will offset depreciation. The company’s WACC is 8%. What is a fair value of the company? [Cash flows, terminal value in Year 6, final value calculation]

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Financial Management: The abc co earned 10 million before interest and taxes on
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