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25 May, 02:45

What do you get when you calculate the present value of the free cash flow of the firm using this discount rate?

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  1. 25 May, 03:10
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    To calculate the present value of a firm, first, determine the expected free cash flows over the specified time period. Next thing is to determine the present value factor for each year using the discount rate given. Next, multiply the respective discount factor by each year's cashflow. This will give you the Present value for each year. Lastly, sum up individual PVs to get the value of the firm.
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