Kedia Inc.forecasts a negative free cash flow for the coming year,FCF₁ = -$10 million,but it expects positive numbers thereafter,with FCF₂ = $34 million.After Year 2,FCF is expected to grow at a constant rate of 4% forever.Assume the firm has zero non-operating assets.If the weighted average cost of capital is 14.0%,what is the firm's total corporate value,in millions? Do not round intermediate calculations.

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11ea856c_8bb4_69db_9aec_eb84a46089fb_TB1222_00 ? First,find the horizon,or continuing,value at t = 2: HV₂ = FCF₂(1 + g)/(WACC - g)= $34(1.04)/(0.14 - 0.04)= $35.36/0.10 = $353.60 Then find the PV of the free cash flows and the horizon value: Total corporate value = -$10/(1.14)¹ + ($34 + $353.60)/(1.14)² Total corporate value = -$8.772 + $298.246 = $289.47

Kedia IncForecasts a Negative Free Cash Flow for the Coming Year,FCF1

Kedia IncForecasts a Negative Free Cash Flow for the Coming Year,FCF₁