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Gupta Corporation Is Undergoing a Restructuring,and Its Free Cash Flows

Question 76

Multiple Choice

Gupta Corporation is undergoing a restructuring,and its free cash flows are expected to vary considerably during the next few years.However,the FCF is expected to be $65.00 million in Year 5,and the FCF growth rate is expected to be a constant 6.5% beyond that point.The weighted average cost of capital is 12.0%.What is the horizon (or continuing) value (in millions) at t = 5?


A) $1,025
B) $1,079
C) $1,136
D) $1,196
E) $1,259

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