What is the horizon value


Response to the following problem:

Current and projected free cash flows for Radell Global Operations are shown below. Growth is expected to be constant after 2008. The weighted average cost of capital is 11 percent. What is the horizon, or continuing, value at 2008?

                                                       Actual                       PROJECTED
                                                        2006            2007           2008         2009

Free cash flow (millions of dollars)        $606.82       $667.50      $707.55      $750.00

 

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Financial Accounting: What is the horizon value
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