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Business, 16.10.2019 23:00 keyshlavazquez5118

Suppose you were trying to value box prior to its ipo using the free cash flow model. you estimate that box has $34,000,000 of debt, no preferred stock, no short-term investments, and will not produce positve free cash flows until 5 years from now. you further estimate that box has a weighted average cost of capital of 15% and will settle down to a constant growth rate of 5%. what is the minimum fcf that box would need to generate in year 5 to be valued as a $1 billion dollar company at its ipo today. for simplicity, assume that fcf in periods 1 through 4 are zero. answer in millions of dollars (e. g., if the answer is one billion dollars enter 1,000 not 1,000,000,000).

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