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A Company Forecasts the Free Cash Flows (In Millions) Shown $331 \$ 331

Question 17

Multiple Choice

A company forecasts the free cash flows (in millions) shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?  A company forecasts the free cash flows (in millions)  shown below. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?   A)    \$ 331   B)    \$ 348   C)    \$ 367   D)    \$ 386


A) $331 \$ 331
B) $348 \$ 348
C) $367 \$ 367
D) $386 \$ 386

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