You are trying to estimate the value of the XYZ Inc. company, as of the end of 2019. The after-tax cashflow from assets (FCFF) for the year ending 2019 is $126 million. The estimated WACC is 11%. What comes closest to the current value of the firm XYZ if the expected after-tax cashflows to assets for the next two years are expected to grow at 15% and then grow at a lower rate of 2% thereafter forever?

$ 1,798.56  

Explanation:

The current value of the firm is the discounted after-tax cashflow from assets  as well as the terminal after-tax cashflows as shown below:

2020 FCFF=$126 million*(1+15%)=$144.90  million

2021 FCFF=$126 million*(1+15%)^2=$166.64  million

Terminal value=2021 FCFF*(1+g)/(WACC-g)

g=terminal growth rate of FCFF=2%

WACC=11%

Terminal value=$166.64  million*(1+2%)/(11%-2%)=$ 1,888.53  million

current value of firm=$144.90  million/(1+11%)^1+$166.64  million/(1+11%)^2+$ 1,888.53  million/(1+11%)^2

current value of firm=$ 1,798.56  

idk

explanation:

bc why nah

answer; swot analysis;