Consider the following data for Kriya Company:

A constant growth rate of 4 percent is sustained forever after year 3. The weighted average cost of capital is 10 percent.
Calculate the present value of the horizon value. (Assume that the horizon value includes the 6.24M FCF in year 4.)
A)$90.4 million
B)$104 million
C)$78.1 million
D)$75.1 million

Question

Consider the following data for Kriya Company:

A constant growth rate of 4 percent is sustained forever after year 3. The weighted average cost of capital is 10 percent.
Calculate the present value of the horizon value. (Assume that the horizon value includes the 6.24M FCF in year 4.)
A)$90.4 million 
B)$104 million 
C)$78.1 million 
D)$75.1 million

Quizplus · Accepted Answer

The Answer of Consider the following data for Kriya Company:

A constant growth rate of 4 percent is sustained forever after year 3. The weighted average cost of capital is 10 percent.
Calculate the present value of the horizon value. (Assume that the horizon value includes the 6.24M FCF in year 4.)
A)$90.4 million 
B)$104 million 
C)$78.1 million 
D)$75.1 million

Consider the Following Data for Kriya Company