13-6 Brooks Enterprises has never paid a dividend.

13-6 Brooks Enterprises has never paid a dividend. Free cash flow is projected to be $80,000 and $100,000 for the next 2 years, respectively; after the second year, FCF is expected to grow at a constant rate of 8%. The company ’ s weighted average cost of capital is 12%. a. What is the terminal, or horizon, value of operations? ( Hint: Find the value of all free cash flows beyond Year 2 discounted back to Year 2.) b. Calculate the value of Brooks ’ s operations.