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A company proposes to value itself based on the net present value of estimated future cash...

A company proposes to value itself based on the net present value of estimated future cash flows.

 

Relevant data:

   • The cash flow for the next three years is expected to be £100 million each year

   • The cash flow after year 3 will grow at 2% to perpetuity

   • The cost of capital is 12%

The value of the company to the nearest $ million is:

A.

$966 million

B.

$1,260 million

C.

$889 million

D.

$834 million

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