Solving Growth (g) — OpenTuition Forums

Eevangeluv12y ago

Hi, can anybody help me with solving this algebra equation on growth? Tried a couple of ways but couldn't get to the correct ans. Formula: TMV = FCFF (1+g) / (WACC - g) Stated ans for g = 0.0434 $763m = 63 (1+g) / (0.1296 - g)

John MoffatTutor12y ago#1

Multiply both sides by (0.1296-g) : 763 (0.1296-g) = 63(1+g) Multiply through: 98.8848 - 763g = 63 + 63g Subtract 63 from both sides, and add 763g to both sides: 35.8848 = 826g Divide both sides by 826 : 0.0434 = g