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Business, 20.06.2020 22:57 elbehairy64

Allied Biscuit Co. is expected to generate a free cash flow (FCF) of $475.00 million this year (FCF₁ = $475.00 million), and the FCF is expected to grow at a rate of 26.20% over the following two years (FCF₂ and FCF₃). After the third year, however, the FCF is expected to grow at a constant rate of 4.26% per year, which will last forever (FCF₄). Assume the firm has no nonoperating assets. If Allied Biscuit Co.’s weighted average cost of capital (WACC) is 12.78%, what is the current total firm value of Allied Biscuit Co.? (Note: Round all intermediate calculations to two decimal places.)

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Allied Biscuit Co. is expected to generate a free cash flow (FCF) of $475.00 million this year (FCF₁...
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