Firm C is considering the acquisition of Firm T. Firm C has estimated the cash

Firm C is considering the acquisition of Firm T. Firm C has estimated the cash flows cost of
capital and growth rate for firm T shown below. Using these estimates estimate the current
value of firm T using the terminal value technique/horizon value.

WACC = 12% g = 3% (assumed constant following year 4).

Check Answer: Estimated Firm Value Today = $31275

Please show all work to get to firm value of $31275!

**After calculating the terminal value at year 4 just combine that number with the year 4 CF
and that will be CF4 for the calculator input. You can then use the cash flow worksheet on a
financial calculator to solve just assume that CF0 = $0.