ACCA AFM
ACCA Strategic Professional (Options) — Advanced Financial Management (AFM)
Acquisitions And MergersEnglish
Exam overviewPractice session
An acquiring company values a target using the free cash flow (FCF) method. After forecasting explicit free cash flows, it applies a terminal value using the Gordon growth model. If year-5 free cash flow is $20m, the long-term growth rate is 3%, and the WACC is 9%, what is the terminal value at the end of year 5?
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