NO.PZ2023032701000103
问题如下：
Using the capitalized cash flow method (CCM), calculate the fair market value of 100 percent of the equity of a hypothetical company, given the following information:
• Current year’s reported free cash flow to equity = $1,400,000
• Current year’s normalized free cash flow to equity = $1,800,000
• Long-term interest bearing debt = $2,000,000
• Weighted average cost of capital = 15 percent
• Equity discount rate = 18 percent
• Long-term growth rate of FCFE = 5.5 percent
选项：
A.15.19 million
16.87 million
14.32 million
解释：
There are FCFF and FCFE variations of the CCM. In this problem, the data permit the application of just the FCFE variation. According to that variation, the estimated value of equity equals the normalized free cash flow to equity estimate for next period divided by the capitalization rate for equity. The capitalization rate is the required rate of return for equity less the long-term growth rate in free cash flow to equity. Using the current $1.8 million of free cash flow to equity, the 18 percent equity discount rate, and the long-term growth rate of 5.5 percent yields a value indication of [($1.8 million)(1.055)]/(0.18 – 0.055) = $1.899 million/0.125 = $15.19 million.
如何得知题目中给的Equity discount rate = 18 percent就是re？
