Use the free cashflow approach to value the firms


The momi corporations cashflow from operations before interest and taxes was 2 million dollars in the year just ended and it expects that this will grow by 5% per annum forever . to make this happen , the firm will have to invest an amount equal to 20% of pre-tax cash flow each year. the tax rate is 35%. Depreciation was $ 200 000in the year just ended and is expected to grow at the same rate as the operating cashflow .the appropriate market capitalisation rate for the unlevered cash flow is 12% p.a the firm currently has debt of 4mill outstanding. use the free cashflow approach to value the firms equity.

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Financial Management: Use the free cashflow approach to value the firms
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