Transcribed Image Text
Bay Properties is considering starting a commercial real estatedivision. It has prepared the following? four-year forecast of freecash flows for this? division:year 1year 2year 3year 4Free Cash Flow-132,00015,00085,000239,000Assume cash flows after year 4 will grow at 5 % per? year,forever. If the cost of capital for this division is 8 %?,a. what is the continuation value in year 4 for cashflows after year? 4?b. What is the value today of this?division?Please answer both questions and show allwork!
Other questions asked by students
Physics
Biology
Accounting