Suppose a firm faces the following costs of capital:
Assume that this firm expects to generate $80 million of pretax-free cash flows.
Required:
(1)What would be the after-tax free cash flows one year from today?
(2)Assuming a one-year horizon,what is the appropriate valuation to be used by the analyst?

Question

Suppose a firm faces the following costs of capital:
  Assume that this firm expects to generate $80 million of pretax-free cash flows.
Required:
(1)What would be the after-tax free cash flows one year from today?
(2)Assuming a one-year horizon,what is the appropriate valuation to be used by the analyst?

Quizplus · Accepted Answer

The Answer of Suppose a firm faces the following costs of capital:
  Assume that this firm expects to generate $80 million of pretax-free cash flows.
Required:
(1)What would be the after-tax free cash flows one year from today?
(2)Assuming a one-year horizon,what is the appropriate valuation to be used by the analyst?

Suppose a Firm Faces the Following Costs of Capital