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Business, 25.12.2019 20:31 gingerham1

Acme corp. is expected to generate a free cash flow (fcf) of $2,840.00 million this year (fcf₁ = $2,840.00 million), and the fcf is expected to grow at a rate of 25.00% over the following two years (fcf₂ and fcf₃). after the third year, however, the fcf is expected to grow at a constant rate of 3.90% per year, which will last forever (fcf₄). assume the firm has no nonoperating assets. if acme corp.’s weighted average cost of capital (wacc) is 11.70%, what is the current total firm value of acme corp.? (note: round all intermediate calculations to two decimal places.)

a. $67,681.56 million
b. $8,571.82 million
c. $61,181.84 million
d. $50,984.87 million

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