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Sir in this question while calculating the FCF the examiner calculated the PV of cash flows by using perpetuity fair enough all i want to know is that why he is not multiplying it with 3 months Discount factor bcoz its a delayed perpetuity as it is starting in year4 and will continue for foreseeable future
Why do you say it is starting in year 4? For the current market value, we take the cash flows from 1 in perpetuity.
You are given information about what happened in its first year of operation, which was three years ago, but that is only so that we can calculate the current earnings and the future rate of growth.
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